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The European Union met its gas storage target more than two months ahead of schedule, but analysts have warned that a cold winter could lead to price volatility, leading to a European scramble for energy.
According to statistics, as of August 16, the storage level in the region reached 90.1% figures have been updated On Friday, the report was released by industry data provider Gas Infrastructure Europe (GIE).
That means they have passed the 90% threshold set by the European Union for Nov. 1, as the bloc eases its reliance on Russian energy to survive the coldest month of the year. The figure is also the highest for this time of year since records began in 2016, the GIE said.
“This will help us stay safe this winter. Together we are weaning ourselves off Russian gas and continuing to work in parallel to provide a more diverse energy supply for the future,” European Commission President Ursula von der Leyen said. der Leyen) on X (formerly Twitter).
European gas benchmark TTF (Title Transfer Facility) futures fell 2.5% on Friday, but remained elevated as analysts warned that high summer inventories could be depleted quickly in the colder months.
There is not enough storage space to meet all of Europe’s gas needs, and risks such as falling temperatures and disruptions to global supplies could send Europe looking again at alternative sources of gas, as it did last year.
Europe has come to rely on LNG purchases to make up the shortfall since Russia began cutting supplies after its all-out invasion of Ukraine last year.
“Europe cannot risk going into winter with low storage levels, as Russian pipeline supply is down compared to pre-war levels, and Europe will have to scramble for LNG in winter, regardless of current storage levels,” he said. Sindre Knutsson, Partner, Rystad Energy.
New demand for LNG in Europe makes it more vulnerable to global energy shocks. One of those is currently coming from Australia, where a potential strike at LNG export sites, which account for 10% of global supply, sent TTF prices surging 40% last week.
Australia is a major supplier to Asia and little of the country’s LNG is shipped directly to Europe. But it would put them in direct competition with Europe if buyers of Australian gas in Asia needed to find alternatives.
Glen Kurokawa of commodities consultancy CRU said: “The reduction in EU and UK gas storage could cover around 15-20% of winter gas consumption, with winter LNG supply accounting for about a third One, the quantity is quite large.”
Talks over the strike between the Maritime Alliance union and gas giants Chevron and Woodside, the operators of the plants, will continue into next week, according to people with direct knowledge of the situation.
Workers at Chevron’s Gorgon and Wheatstone plants began voting on strike action on Friday, which would allow the union to decide whether to take strike action later this month if negotiations fail. In a statement posted on Facebook on Friday, the union accused Chevron of operating a “feudal domain.”
Woodside said “positive progress” had been made in last week’s talks, with agreement in principle on some issues reached. Chevron said it will continue to engage with the union.
Additional reporting by Alice Hancock in Brussels
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