Winter is "costing" Europe dearly - It needs over 10 billion euros extra to replenish gas deposits
Europe may need up to 250 additional cargoes of liquefied natural gas this year costing at least 10.3 billion euros to replenish gas storage facilities before winter.
Demand during the winter of 2024-25 was higher than a year earlier due to colder and less windy weather, resulting in more withdrawals from European Union storage facilities, which are now less than 34% full, the lowest figure since 2022.
Based on the European Commission's current targets, set to help prevent supply shortages after Russia's invasion of Ukraine in 2022, gas storage sites across the EU should be 90% full again by November 1.
With more gas to buy and fewer supplies coming from the pipeline, Europe will have to rely on globally traded LNG and pay a higher price to compete with buyers in Asia.
"Europe will have to buy quite aggressively this spring and summer to replenish inventories," sector experts say.
Achieving the 90% target would require 57.7 billion cubic meters of net injections, 25.8 billion more year-on-year, or up to 250 additional LNG cargoes, according to analytics firm Kpler.
Based on the current European gas price of around 41 euros per megawatt-hour, that would be an additional cost of 10.3 billion euros to fill storage spaces this year, according to Reuters calculations.
"It is expected that the November 1 target will be postponed, to give more room for maneuver to European importers to meet the targets this year," analysts say.
The European Commission is considering easing storage requirements, with the latest proposal suggesting reaching 90% without a specific date between October 1 and December 1.
According to analytics firm Kpler, EU storage could be 76-78% full by November 1 and still comply with potential new regulations. That would still require 120 additional LNG cargoes year-on-year, the analysts explained.
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