Return of cold weather triggers large use of gas infrastructure in Europe

March 20, 2018

• Efficient operation of gas transmission, storage and LNG assures security of energy supplies
  to European houses
• Some European countries receive about half of its daily gas consumption from gas storages
• Storage operators are not fully remunerated for their role in security of supply

Low temperatures in the second half of March in large parts of Europe increased the use of gas infrastructure. This follows a period of cold weather in the second half of February when effective use of gas transport, storage and LNG terminals was essential in delivering energy to all EU citizens and keeping the European houses warm.

Mr. Jean-Marc Leroy, President of Gas Infrastructure Europe, said: “The current situation highlights the strategic importance of a resilient gas system where all the main gas infrastructure operators of the gas value chain play their role. However, the winter period is not over yet and another cold spell this week is capturing our full attention.”

While a well-integrated transport gas network is key in further increasing the liquidity of the energy market and LNG terminals continue gaining significance by increasing the level of competition between suppliers, underground gas storages play a crucial role in coping with high demand variations. According to AGSI+, the gas stock level platform operated by GIE, the storage withdrawals reached 11.4TWh on the 28th of February 2018, the highest since 2011. In some countries, for example in Germany, more than half of its daily consumption was sourced from gas storages.

Mr. Lubor Veleba, Member of the Board, Gas Infrastructure Europe, noted: “Gas storage facilities in many European countries provide more than half of daily gas consumption on cold days.  I regret, however, that storage operators are often not fully remunerated for their role in security of supply.” Gas storage users typically value storage on long term seasonal gas price spreads rather than day ahead or security of supply considerations.

The European gas storage fill level stand at 21,7% on the 18th of March, the lowest since 2011 for this date. Consequently, the market participants track closely the inventory levels that need to be sufficient to cover the fluctuating demand until the end of the winter. The heavy use of gas storage this year highlights the need for a continued discussion at the European level. Under the evolving market conditions and in the absence of full remuneration of storage operators, there is a risk that in future gas storage may not be able to deliver required filling levels.

Note to editors

Who is GIE?

Gas Infrastructure Europe (GIE) currently represents 68 member companies from 25 countries. Its internal structure has three columns corresponding to the three types of infrastructure activities represented: GTE (Gas Transmission Europe), GSE (Gas Storage Europe) and GLE (Gas LNG Europe), all of which fall under the umbrella of GIE. This structure allows member companies to speak with one voice on infrastructure topics as well as to build positions on column-specific issues.