The continent urgently needs to fill up its storage before the next heating season starts
© Getty Images / HAYKIRDI
The EU has ramped up energy purchases, importing natural gas at a premium because of its urgent need to fill storage facilities before either winter comes or Russia turns the gas taps off due to importers refusal to pay in rubles.
Data from Reuters shows that inventories are currently filling up faster than previously expected. According to statistics, requests for Russian gas deliveries to Europe hit a five-month high this month. LNG imports have also been on the rise.
According to the report, at the start of May, natural gas inventory levels in Europe were 18% below the five-year average from before the pandemic. The amount of gas in storage in the EU and the UK has grown to 380 terawatt-hours (TWh). At this rate, gas in storage could reach 904 TWh by October 1 when the heating season begins, analysts say.
Read more
The EU pledged to slash Russian gas imports by two-thirds by next year and to eliminate its dependence before 2030. The push to wean itself off Russian energy comes amid already growing global demand and high LNG prices. Russia has been a major supplier of energy to the EU, meeting roughly 40% of the bloc’s demand for natural gas.
According to researcher EWI, if Moscow suspends gas flows now, the EU—excluding Spain and Portugal—and the UK, together, would need to slash gas consumption by 459 TWh during the summer. In case the region seeks to maintain a 33% level of gas inventories to total capacity, then it would have to reduce consumption by as much as 790 TWh, the researcher said.
Meanwhile, concerns have been growing that if the EU is buying up natural gas at “exceptionally high prices,” then the price it would sell it for to its consumers would simply be not affordable for everyone. Businesses and consumers across the continent have already been struggling with their electricity bills, and some have even warned about imminent bankruptcies because of excessive energy costs.
For more stories on economy & finance visit RT’s business section
