Europe is facing gas supply problems for the winter: storage facilities are only 54% full
26 July 09:17
Europe will most likely fail to meet its own target of filling gas storage facilities to 80% capacity by the start of winter. This was stated by the CEO of Equinor, Europe’s largest natural gas supplier. This was reported by [Komersant], citing Reuters.
The reason is tension in the global gas market and increased competition from Asian buyers.
“We do not believe that Europe will necessarily be able to fill its storage facilities to more than 80% this fall,” said Equinor CEO Anders Opedal.
The situation with storage facilities looks alarming, as the current fill rate is only 54%.
This is:
- significantly below the average for the past five years;
- the second-lowest level in 15 years;
- a figure close to the all-time low for this time of year, which was recorded in 2021.
According to Opedal, due to low storage levels, Europe will be more vulnerable to market price fluctuations this winter than in previous years.
Rerouting
One of the main reasons for the shortage is the rerouting of liquefied natural gas (LNG) supplies. This is gas that has been cooled to a liquid state for transport by sea tankers rather than via pipelines.
According to Equinor, Europe meets about 30% of its imported gas needs with LNG. But right now, a significant portion of these supplies simply isn’t reaching the continent.
“Gas that was supposed to come from Qatar was destined for Asia, which means that the LNG that was previously coming to Europe earlier this year is now heading to Asia,” Opedal explained.
Simply put: Asian buyers are now offering higher prices for gas, and suppliers are rerouting tankers toward them.
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