The Netherlands will miss its target to fill natural gas storage sites ahead of the winter, its gas network operators said on Wednesday, in one of the first evidence-based signs that Europe may be struggling to have sufficient supply for a harsh winter.
Gasunie, the Dutch gas network operator, on Wednesday warned that the country will miss its target to have 115 terawatt-hours (TWh) worth of gas supply.
In response to recent media reports about the state of the storage filling, Gasunie said that “based on the latest developments, the Netherlands will no longer meet the previously set filling target for this winter (115 TWh) – which is approximately half of Dutch gas consumption.”
The filling target proposed by Gasunie Transport Services (GTS) – a wholly owned subsidiary of Gasunie – was established based on the amount of gas required during the harshest winter of the past 30 years.
Despite the target being no longer achievable, the operator said that this doesn’t necessarily mean that the Netherlands would not have enough gas supply for the winter or that security of supply is at risk.
“This situation does mean that, without additional policy, the Netherlands is insufficiently prepared for a scenario in which the winter would be one of the harshest,” Gasunie said.
The gas network operator is currently studying how to keep gas supply as high as possible in the dramatically changed geopolitical situation and market conditions in the past half year, and prevent further upward pressure on the gas market and prices.
Across Europe, current inventory levels are at the lowest in 17 years, and supply available for purchase is tighter than it was ahead of the 2022/2023 winter, as Qatar’s LNG flows are now mostly cut off by the Strait of Hormuz crisis.
EU gas storage levels at 63% full right now are below the 5-year average of 80% and also lower than the nearly 76% at this time last year.
“At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season. This raises the prospects of forced buying, increasing upside risk for gas prices,” ING’s commodities strategists Warren Patterson and Ewa Manthey wrote in a note this week.
By Charles Kennedy for Oilprice.com
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