Germany is examining various market options to increase gas storage ahead of the winter season. According to available information, the natural gas storage capacity in this country, as the largest economy in Europe and the fourth largest in the world, is only 56 percent full of its total capacity. This figure is considered the lowest level in about 15 years compared to recent history.
Factors affecting the decline in storage levels
High natural gas prices due to tensions in the Middle East have pushed the market structure backward, causing many traders to be reluctant to store gas for future deliveries. In such circumstances, gas storage levels in Germany are significantly at risk, and the country may face a gas shortage if a colder winter than previous years occurs.
Read more: Cooperation between Oman and Pakistan to link the ports of Sohar and Gwadar
German government's strategies to increase storage
The German government is considering using existing market tools, including the autumn tender for long-term options (LTOs), to increase gas storage levels. According to government sources, this tender is set to be implemented more broadly, and the amount of gas intended for increased storage has not yet been specified.
Germany is trying to avoid direct government gas purchases, similar to what was done in 2022. However, it has reached agreements with state energy companies, including Uniper and SEFE, for increased gas injection into its storage facilities. Recent warnings from the German Gas Storage Association (INES) indicate that the filling process for storage has so far been significantly below the required level, and time for completing the filling of reserves is running out.
Sebastian Heinermann, CEO of INES, stated: "While it may still be technically possible to reach a storage level of around 77 percent, merely having reserved storage capacities is not enough. Filling storage facilities must be economically viable for market companies to actually take action."
Read more: Natural gas prices in the Southeast U.S. reached nearly $7 · The reduction of the 50 percent tariff by the U.S. on Canadian aluminum has little impact on prices
