EU countries to discuss relaxation of gas storage targets, sources say

By Kate Abnett and Julia Payne

BRUSSELS (Reuters) - European Union countries will on Thursday discuss demands from some governments to relax the bloc's gas storage targets, EU sources close to the matter told Reuters, as concerns mount over the cost of refilling Europe's gas caverns this year.

EU gas storage sites are less than half full after cold weather and reduced Russian supplies triggered a faster drawdown of stocks, Gas Infrastructure Europe data shows.

That has raised concerns among some governments about the cost of complying with the EU's binding targets to fill storage. The targets require all countries to refill their caverns to 90% of capacity by November.

Benchmark European gas prices rose to two-year highs this week and three EU sources said a group of countries will raise their concerns in a meeting of member states on Thursday, with some planning to ask the European Commission to soften the targets in a coming proposal to extend them beyond 2025.

The Commission plans to propose the extension beyond the scheduled expiry in December this year, Reuters reported previously, but some nations have indicated they will not back an extension of the rules in their current form.

Two of the sources said some nations also want this year's targets softened, potentially by making the intermediate targets for February, May, July and September voluntary rather than compulsory.

Governments are worried that setting fixed deadlines to fill storage could cause price rises by signalling to the market that Europe needs to buy more gas by a specific date.

Another worry is how countries can recoup the potentially high costs of filling storage ahead of winter.

Germany had introduced a tariff on gas sales to neighbouring countries to cover the high costs of filling its storage with non-Russian gas in 2022 but later scrapped the measure after criticism from its neighbours.

(Reporting by Kate Abnett and Julia Payne; Editing by David Goodman)