Europe: UGS Facilities Are 85% Full

To date, more than 93 billion cubic meters of gas have been loaded into EU underground gas storage facilities. In order to survive the 2023-2024 winter season without problems, the storage rooms should be filled to 90% of their maximum capacity before turning on the heating.

European countries have managed to fill underground storage facilities to 85% of their maximum capacity. According to Gas Infrastructure Europe (GIE), “if the current supply pace continues, the countries of the European Union already in August could reach the target level of 90% accepted as a guarantee of safety for the 2023-2024 winter season without any problems.”

It will be a really great result, as previously European Energy Commissioner Kadri Simson expected that gas storage facilities could be 90% full only by November 2023. Last year, this figure was reached in early October.

Due to Western sanctions against Russia, the powerful flow of Siberian gas to Europe has been reduced over the past two years to a thin stream, which, having passed through the Ukrainian territory, should then be distributed among several EU countries, primarily Hungary, Slovakia, and Austria.

On July 9, Vienna announced that it would continue to import natural gas from Russia under the long-term contracts. According to Austrian OMV group CEO Alfred Stern, “as long as Gazprom continues to deliver, we will continue to receive gas volumes, as stipulated in the agreements.”

Currently, the transit of gas to Europe through the territory of Ukraine averages 40-43 million cubic meters of “blue” fuel per day.

According to Ukrainian Energy Minister Herman Galushko, Russia will be able to completely block gas transit through Ukraine by the end of 2024, when the contract between Gazprom and the Kyiv government expires. In an

interview with the Financial Times, Galushko said that “it will be difficult, almost impossible, to reach an agreement with the Kremlin to extend the current five-year agreement, even with the possible mediation of European politicians.”

At the same time, Russia is increasing its own exports of liquefied natural gas (LNG), thanks to the implementation of the program by the Novatek group of the vibrant and ambitious multi-billionaire Leonid Mikhelson. On July 20, Russian President Vladimir Putin inaugurated the commissioning of a maxi-plant for the production of LNG in the northern city of Murmansk as part of the Arctic LNG-2 project, the implementation of which is designed to increase global production of liquefied natural gas by at least 5 percent.

As a result, European countries learned the lessons of the rough 2022-2023 winter season and looked for new suppliers 360 degrees around. The results were not long in coming: the volumes of gas pumped to European storage facilities in July broke the record of the last five years. According to the GIE data, more than 93 billion cubic meters of gas have been loaded to date into underground gas storage facilities in the European Union.

In addition to the Middle East and African countries, Europe also intends to turn to the former Soviet republics of Central Asia. According to Bloomberg, one of the options could be Turkmenistan, one of the five countries with the highest gas reserves. However, there are those who argue that Turkmenistan does not yet have adequate production and transport structures and could simply resell to Europe the gas purchased from Russia at “political” prices.