The winter storage of natural gas has reached record levels in Europe, which puts the region in an excellent position to overcome the energy crisis that has dominated the continent for over two years.
Gas Infrastructure Europe, the industry’s trade association, reported that the EU gas storage at the end March, which is considered by the industry to be the end winter season, was 58.72 percent full. This is approximately 3 percentage points more than the previous record, which was set last year.
Analysts warn that the EU may have to reduce imports in the next few months in order to prevent capacity being filled too soon.
Gas usage was kept in check by a mild winter that swept across Europe. Strong LNG imports, a lackluster economy, and EU targets to reduce demand. According to data from the think-tank Bruegel, demand was a fifth less in February than averages for 2019-2021.
Ana Maria Jaller Makarewicz, energy analyst for the Institute for Energy Economics and Financial Analysis (a think tank), said that the EU’s comfortable position “is a shock for everyone”.
“We thought (at the beginning of the energy crises) that” . . She said that we would have a lot of problems. She added that the EU’s decision on increasing LNG imports and introducing gas-savings measures was “very important”.
The Energy Crisis in Europe began in 2021, when the region emerged from a long and cold winter that left low levels of natural gas stored. As Russia began to reduce its gas supplies to Europe, concerns about tight supply grew. Some saw this as a way to force Germany and Brussels into approving the controversial Nord Stream 2 pipeline.
Few believed that the EU could survive two consecutive winters with no significant disruptions in its energy system. Blackouts, at the beginning of the crisis were a very real threat.
Natasha Fielding is the head of European Gas Pricing at Argus, a price agency.
She noted that the EU could reach its 90 percent capacity target by early November if the injection rate is similar to the pace of last year.
The European Union may have to purchase less LNG in the summer months to counteract the weaker demand. This will also slow down the pace at which the LNG stock is being built, and prevent the sites from filling up too early.
The Russians attacked a storage site underground last week, but “the situation will not critically impact” operations. Last week, Russia attacked a storage facility underground, but “the situation won’t have a critical impact” on operations, , according to Naftogaz.
The price of TTF (Europe’s benchmark for natural gas) has increased by around 20% compared to a month earlier when prices had dropped to levels seen before the energy crisis, due to tightening supplies resulting from maintenance at an important US export facility.
Gas prices are still “not likely to increase or fall much from their current levels” of about €25 per megawatt-hour, according to Engie analysts in a Monday note. This is due in part because there is so much gas in storage.