Central European countries prepare to stop gas transit through Ukraine
The European Union will have sufficient gas reserves next winter, and the remaining buyers of Russian pipeline gas in Central Europe are working on alternative imports in case transit through Ukraine is cut off.
This was reported by Reuters.
European gas prices have fallen to the level seen before Russia's invasion of Ukraine in February 2022, hitting a three-year low in February this year as mild weather and high renewable energy generation limited gas demand and reduced the amount of gas that needed to be lifted from storage.
However, the agreement signed in 2019 between Naftogaz and Gazprom that allows Russian gas to flow through Ukraine expires at the end of the year.
Ukraine has repeatedly stated that it does not plan to extend the agreement, although it is unclear whether it will allow a loophole through which European companies could book transit capacity themselves, avoiding a direct agreement between Russia and Ukraine, Reuters notes.
With just a few days left in Europe's winter gas season, which ends on March 31, gas stocks in Europe are 59% full, a record high for this time of year, according to Gas Infrastructure Europe.
“Europe is on course for another record high in start-of-summer inventories and it looks like the continent will again be on course to fill its storage sites (for next winter) early,” said James Waddell, head of European gas and global LNG at consultancy Energy Aspects.
As part of the EU's mandate following Russia's invasion of Ukraine, European gas storage facilities must be 90% full by November 1.
Gas stored in storage typically accounts for about a quarter of winter gas consumption in Europe, where it is the main heating fuel, and high stock levels should give Europe a good chance of meeting next winter's supply and avoiding sharp price shocks.
