Editorial comment
European stockpiles of natural gas have been closely watched ever since the start of Russia’s invasion of Ukraine back in 2022. The continent has adapted remarkably well, reducing its use of natural gas and replacing Russian imports with LNG from the US and elsewhere. However, as a selection of world leaders gathered in Kyiv to mark the third anniversary of the start of the conflict, there is rising concern about Europe’s gas storage inventories once again.
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Cold weather, combined with more windless days, has seen the continent burn through its gas reserves more quickly over the winter. There is currently less gas in storage than is customary at this time of year, with data from Gas Infrastructure Europe suggesting that EU gas storage sites had dropped to 44% full in mid-February.
This is the lowest level since the start of the energy crisis three years ago. The price of summer gas contracts jumped to a two-year high on 10 February, as fears begin to grow about how the continent will refill its storage levels in time for next winter. As a result of these price increases, European leaders are considering relaxing their gas storage targets. Under the European Commission’s mandatory refilling target, the majority of EU countries need to refill their storage to 90% of capacity by 1 November. However, a draft EU document has showed that the Commission will work on more flexible targets for countries to refill their gas storage ahead of winter.
It is hoped that the removal of strict filling deadlines will reduce the likelihood of prices being driven up. The draft document said: “The Commission will work with member states, also in the context of the gas storage regulation extension, to promote more coordinated and flexible gas storage refilling, including with dynamic targets.”1
In the background, there is also the start of negotiations between the US and Russia to end the war in Ukraine, with some talk that this could even revive Russian gas imports into the continent. Whether or not this forms part of any peace deal remains to be seen. But Europe will likely be extremely wary of returning to the pre-war status quo, and abandoning its mission for energy independence from Moscow.
However, as the Financial Times eloquently pointed out in a recent editorial: “Until Europe fixes its underlying energy mix – in a way that doesn’t periodically shutter its industry – it will find it hard to fully quash the siren song of Russian gas.”
The UK is also facing similar gas storage worries. According to Centrica – the operator of the country’s largest gas storage site – the UK’s winter gas storage is down to “concerningly low” levels. The company is calling for investment in the country’s gas storage capacity as a valuable insurance policy. I recently sat down with Peter Davidson, CEO of the Tank Storage Association (TSA) – a UK-based trade association representing the interests of companies engaged in the storage of bulk liquids and the provision of products and services to the sector – for an episode of the Hydrocarbon Engineering Podcast. We discuss security of supply in detail, as well as a number of other topics including safety, the rise of new technology, and the role of tank storage in facilitating the energy transition.
The episode will be available soon. To subscribe to the podcast click here.
- 'European gas faces déjà vu all over again’, Financial Times, (18 February 2025).
