Europe may face a new round of gas price increases and a serious energy crisis next winter if it fails to replenish its underground storage facilities in time. This opinion was expressed in a comment for TASS by Anastasia Levchenko, Researcher at the Gaidar Institute's Industrial Organization and Infrastructure Economics Department. The expert analyzed the situation on the European gas market and warned of the risks associated with record gas consumption rates this winter.
Anastasia Levchenko explained that EU countries have exhausted the gas volumes pumped in on last summer and have already begun to withdraw strategic reserves accumulated in previous years. According to TASS calculations based on GIE data, net gas withdrawal has exceeded 55 billion cubic meters since the beginning of the heating season.
“The rate of gas withdrawal this winter has been the highest in the last five years. As of mid-February, EU storage facilities are only 34% full, which is significantly below the historical average of 50-58% for this time of year,” the expert cited statistics.
“If the lack of snow this summer means that more gas has to be burned to generate electricity, this will create the risk that Europe will not be able to meet its target of filling underground gas storage facilities to 90% by November 2026, which will lead to a new round of price increases and a crisis next winter,” Anastasia Levchenko predicted. She noted that the situation is affected by a combination of factors: abnormally cold weather in Northern and Central Europe, a reduction in LNG production in the US due to Arctic cold spells, and high spot prices, which make importing liquefied gas less profitable than taking it from storage facilities.
The expert is particularly concerned about the situation in Germany. According to her, if the current withdrawal rate (1.5–1.7 TWh per day) continues, the country's reserves could be depleted in 35–40 days. Anastasia Levchenko also drew attention to technical limitations that could exacerbate the crisis: when the level of gas in storage facilities falls below 20%, the withdrawal rate drops non-linearly, which threatens the inability to meet peak demand on the coldest days.
In conclusion, the expert noted that in order to meet the EU's 90% fill rate by November, Europe will need record volumes of LNG imports – more than 185 billion cubic meters. This will put a huge strain on the global market and keep prices high, which will continue to put pressure on energy-intensive industries and consumers' wallets.