Equinor warns Europe’s gas reserves are quickly depleting
Europe may need to secure up to 350 additional cargoes of liquefied natural gas this year to replenish its rapidly depleting storage facilities, according to one of the region's leading suppliers of the fuel, News.Az reports citing foreign media.
In a worst-case scenario, European gas reserves could be only 30% full by the end of the winter, said Helge Haugane, senior vice president for gas and power at Equinor ASA, during an interview at E-World in Essen, Germany.
“Attracting an additional 250-350 LNG cargoes this year compared to last year will be critical to refilling storage over the summer, which could be costly and require regulatory intervention,” he said.
The region’s declining gas inventories have become top of mind across energy-market and policy circles. While countries have been tapping reserves faster than usual, prices for summer are so high that it would be unprofitable to store gas for the next winter.
“If governments leave it to the market, the market will solve it, but it might be in a way which means that storage levels would fall significantly short of the wanted level of up to 90%,” Haugane said. “In a scenario where it gets colder than expected, there could be very high price spikes, which could mean serious distress and that some industries could be forced to reduce consumption and consumers again have to experience very high short-term prices.”
Chilly and low-wind conditions across Europe have boosted gas consumption this winter and weighed on renewable generation. Inventories are only about 48% full, compared with 67% a year ago, and it will be an uphill battle to replenish them during the warm months.
Equinor, which produces, trades and stores gas, says that in a more optimistic scenario, Europe could end winter with storage sites around 40% full. That would require “give or take 250 terawatt-hours more of LNG,” he said. A terawatt-hour is roughly equivalent to one LNG cargo.
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