Amid Reports of Gas Shortages in Europe, EU Says Its Ready for Winter

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

Diversity means European Union states are likely to avoid supply disruptions for natural gas. Various reports suggest otherwise, though the bloc has distanced itself from the risks associated with piped gas.

Diversity is Key

Better preparations with a diverse energy mix, that includes higher imports of liquefied natural gas (LNG), means the European Union (EU) will likely avoid supply shocks in the upcoming months, the bloc said in a statement.

During a meeting of member states on Thursday, the European Commission said that, while global tensions are a disruptive factor in general energy flows, the European Union is better prepared to face supply-side risks.

"Based on historical projections, the EU is on track to achieve an adequate level of winter preparedness," the commission said in a readout.

Before the conflict in Ukraine began in 2022, Russia was a major supplier of natural gas to the European Union, moving supplies through midstream networks in Eastern Europe and through the Baltic Sea.

The twin Nord Stream pipeline in the Baltic was sidelined early in the conflict by sabotage. Since then, the bloc has turned to supplies of liquefied natural gas (LNG) as an alternative to Russian piped supplies, which remain vulnerable due to cross-border risks.

Much of those supplies of LNG came from the United States, where the sector is propped up by the nation's vast shale natural gas reserves. In its NATGAS Today report for Friday, IIR Energy found the amount of feed gas running to terminals that can export LNG was running at around 18.5 billion cubic feet per day (Bcf/d) this week, just shy of the late 2025 record of just over 19 Bcf/d.

Last year, U.S. federal data showed France and the Netherlands were the top destinations for LNG exports. Among the larger terminals in the region, Industrial Info Resources finds the Dunkirk LNG Import and Regasification Terminal in France has the capacity to turn LNG into 1.3 Bcf/d of gas.

The European Commission's statement followed various media reports suggesting dire straits for the bloc, with gas reserves at a multi-year low. Overall, the bloc shows its gas storage levels are 65% full. Dutch storage, however, is only 48% full, while France storage is at 72% of its peak capacity, based on data from Gas Infrastructure Europe.

Mandates for EU member states require storage levels held above 90% between October 1 and December 1 to ensure energy security during the winter. Only Portugal and Poland have storage levels that high.

Ole Hanson, the head of commodity strategy at Saxo Bank in Denmark, said in a Friday newsletter the issue isn't about shortages, but more about low inventories and lower output from renewables.

U.S. LNG Doing Some of the Heavy Lifting

In the U.S. market, meanwhile, just one terminal alone can fill up Dunkirk. The Sabine Pass terminal, operated by Cheniere Energy in Louisiana, can process as much as 5.6 Bcf/d in feed stock. Another major supplier, Qatar, however, is sidelined by the conflict in the Middle East.

"Geopolitical uncertainty continues to drive significant price volatility," the Commission stated. "The commission will keep monitoring the situation very closely in cooperation with member states and stakeholders."

A profile from the U.S. International Trade Association finds Italy is the third-largest market for natural gas, after the United Kingdom and Germany, respectively, and nearly 25% of that gas was in the form of LNG.

On August 28, Italian energy company Edison S.A. said QatarEnergy declared force majeure for five cargoes to early November, bringing the total for Edison to 29 since the Middle East conflict began.

Edison in 2009 signed a 20-year supply contract to secure around 226 billion cubic feet of gas in the liquid form annually with QatarEnergy. That's about 10% of total Italian gas consumption.

Much of that arrives at the Adriatic LNG terminal, which has a peak regasification capacity of 767.5 million cubic feet per day, along with storage.

By the Numbers

• 65% of gas storage capacity in Europe is full
• 90% level is targeted for the winter months

Key Takeaways

• The European Commission believes it can avoid gas shortages in the coming months.
• LNG helped diversify gas trade networks away from pipelines.

About Industrial Info Resources

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