Without Russian gas supplies, Europe would have a difficult time restocking its gas storage facilities.
Analysts have warned that if Russia’s gas exports are interrupted due to a dispute over payment terms, Europe’s plans to build inventories and assure gas supplies for next winter might be thrown off course, potentially leading to a reduction in industrial production.

Russia generally supplies roughly 40% of Europe’s natural gas needs, but the likelihood of supply disruptions has increased in recent weeks as a result of Moscow’s invasion of Ukraine and the refusal of G7 nations to accept Russian roubles as payment for their gas purchases. click here to find out more



According to the European Commission, gas stored in storage accounts for around a quarter of the total amount of gas consumed in Europe during the winter months, when it is a key heating fuel.

In an effort to ensure adequate supplies for the coming winter, the government has proposed legislation requiring gas storage operators to fill their facilities to at least 80% of their capacity by November 1.

Without Russian supplies, however, the task appears to be extremely difficult to complete with inventories being only around a quarter filled and below the five-year average for this time of year of just under 34 percent.

Storage of natural gas Europe’s gas archiving system Europe
Reuters Illustrations Reuters Illustrations
As long as at least some Russian natural gas continues to flow, the 80 percent objective by November 1 is doable, according to Jack Sharples, a Research Fellow at the Oxford Institute of Energy Studies in the United Kingdom. In terms of accomplishing it without Russian gas, though, I believe it is simply not doable at this time.

Germany, Europe’s top gas user, which relies on Russia for almost half of its needs, has set a target of 90 percent by November. Russia now supplies around half of Germany’s needs. The company’s gas reserves are currently 26 percent filled. click here to find out more

However, in an unprecedented action, the country on Wednesday activated an emergency plan, which might result in the government rationing electricity if Russia’s gas shipments are disrupted or suspended entirely. click here to find out more

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After declaring an EU-wide or regional gas supply emergency – which it can do if at least two countries have already issued their own declarations – the European Commission stated that immediate supply emergencies would take precedence over refilling storage, with targets no longer valid.

According to Kateryna Filippenko, Principal Analyst, Global Gas Supply at Wood Mackenzie, “If Russian flows cease tomorrow and do not resume until next winter or for the entire year or longer, storage will not be able to fill to the 80 percent level.”



“Most likely, in the EU, storage will account for slightly more than half of the total, perhaps about 54 percent.”



This, according to Filippenko, may create difficulties for the industrial sector because Europe would strive to protect vulnerable consumers by reducing industrial gas consumption by as much as a fifth.

In addition, the storage strategy is complicated by the fact that the Russian state-owned gas corporation Gazprom (GAZP.MM) controls numerous northwest European storage facilities, where stockpiles are at their lowest levels in at least five years.

Gazprom owns a third of the natural gas storage capacity in Germany (GAZP.MM).

Energy Aspects’ Leon Izbicki, Associate, European Natural Gas, said, “Gazprom is unlikely to attempt to fully refill these sites given the progressively lower contractual demand for Russian supply and the lack of appetite for Gazprom to sell on the spot market.” Izbicki is an expert in European natural gas.

The Trading Hub Europe (THE), a gas market hub regulated by Germany’s energy regulator, is permitted to use storage facilities that are empty or below specified filling levels in order to hold its own purchases if the country faces a risk of gas shortages, according to German legislation.

“Market managers such as THE are likely to take advantage of this opportunity under the ‘use it or lose it’ principle…and fill this capacity,” Izbicki said in an interview.

The European Commission has also proposed that, starting in 2023, all gas storage facilities should be 90 percent full by November 1 of the same year they were built.

It is the EU’s goal to reduce its reliance on Russian gas by two-thirds this year and to completely phase out Russian fossil fuel imports by 2027.

They will come out stronger

No matter how it goes

Who will replace their market for Russia?

sapientia:
They will come out stronger

No matter how it goes

Who will replace their market for Russia?

Do you know europe is number 2 customer?

China number 1


Problem is replacement takes year’s

ken6488:

Do you know europe is number 2 customer?

China number 1


Problem is replacement takes year’s

Since china is no 1, who will then replace Europe market?

Replacing market is more difficult than replacing source