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bne IntelliNews – European gas storage on track to reach 80% full by start of heating season

Gas storage tanks in Europe were 58.23% full as of June 26 and are still on track to meet the EU’s target of 80% filling by October 1, the traditional start of the heating season, despite Russian cuts in gas flows to Europe this month.

Fears that the EU will face another gas crisis this winter have been raised after Russian gas giant Gazprom cut gas flows to Europe by 60% in mid-June in what many have said political attack and renewal of last year’s gas deal. wars.

Germany was all the more alarmed as it remains by far the most exposed to Russian gas deliveries. Germany imports the most gas from Russia directly through the Soviet-era pipeline network, and since it has no LNG terminals, it has few options for finding alternative sources if Russia cuts gas completely. gas supply.

German Economy Minister Robert Habeck accused Russia of an “attack” and said Gazprom was cutting supplies for “political reasons” in a June 21 speech. It also put Germany on energy “alert”, the second of three phases of energy alerts. established by the EU in 2017, and ordered coal-fired power plants to be prepared for emergencies.

Other EU members are less alarmed. Twelve other EU countries have also triggered the alert system, but they remain at the “early warning” stage, when a problem is anticipated but no action is yet required. The final “emergency” stage allows governments to directly take control of energy supplies and introduce a system of rationing available fuel supplies.

As the chart shows, the injection rate (red) has dropped dramatically over the past month, but this follows record injection rates since February. European reservoirs have been replenished this year much faster than in previous years and well ahead of the five-year average rate (green dots) as well as the injection rate in 2021 (red dots). The current replenishment rate is still at the five-year average, even after Gazprom reduced the flow rate in mid-June.

The comparison with 2021 is an important benchmark as this year marked a full-fledged gas crisis and Europe started the gas season with tanks only 77.3% full – the first time in a decade that the gas season heating started with tanks less than 80% full. If the current measure of the percentage of full reservoirs (black) falls back to the 2021 rate (black dotted line) in the coming months, another gas crisis is almost certain.

Replenishment rates have been boosted by record LNG deliveries, particularly from the United States, which are beyond Gazprom’s control. This meant that reservoirs were 50% full earlier than expected on June 17 (black), ahead of their 2021 level (black dotted line) and on par with the five-year average (blue dash).

The injection rate has dropped precipitously over the past two weeks and is currently hovering at half the rate of previous months, but given the historically high injection rates at the start of this year, there is more room to manoeuvre. and Europe is still on track to meet the 80% full target set by Brussels earlier this year, which will currently be reached on September 30 at current fill rates.

Gas deliveries are likely to continue at a slower pace as Gazprom says its main pipeline, Nord Stream 1, is operating at reduced rates after Siemens was unable to return compression equipment sent in for repairs, in reason for the penalties.

Another maintenance cut is scheduled for the end of July when Nord Stream 1 will be taken completely offline for a week for its annual check-up.

However, some of the reduction in the recent hiccup will be restored after TurkStream, which supplies gas to southeastern Europe, was brought back into service this week, after flows were temporarily suspended, also due to technical problems. Nord Stream 1 supplies about 55 billion cubic meters per year and TurkStream some 31 billion m3 per year of gas out of the 155 billion m3 that Russia sent to Europe last year.

Thanks to the supply from Norway and the Netherlands, many countries are already able to get through the winter. In Poland, Portugal and the United Kingdom, the reservoirs are already full and from October 1, a new gas pipeline will connect Poland to Norway, making it the first European country to completely get out of its dependence on gas. Russian. That leaves Germany and Italy as the most exposed to Russian gas, where reservoirs are 60.53% and 57.22% full respectively as of June 26.