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Europe could need extra $11 billion of gas to refill winter stores
Published by Global Banking & Finance Review®
Posted on April 1, 2025
4 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 1, 2025
4 min readLast updated: January 24, 2026
Europe may need $11 billion in LNG to refill gas storage for winter, with Ukraine requiring additional imports due to domestic shortages.
By Nora Buli
OSLO (Reuters) - Europe may need up to an extra 250 cargoes of liquefied natural gas this year costing at least $11 billion to refill its depleted gas stores ahead of winter, with Ukraine requiring at least another 30 cargoes, according to analysts and data.
Demand during winter 2024-25 was higher than the year before due to colder and less windy weather, resulting in more withdrawals from European Union stores, which are now just under 34% full, the lowest since 2022.
Based on current European Commission targets, set to help prevent supply shortages following Russia's invasion of Ukraine in 2022, gas storage sites across the EU must be 90% full again by Nov. 1.
With more gas to buy and fewer supplies coming by pipeline, Europe will need to rely on globally traded LNG and pay a premium to attract cargoes in competition with buyers in Asia.
"Europe will have to buy fairly aggressively this spring and summer to refill inventories," Jason Feer, global head of business intelligence at energy and shipping brokerage Poten and Partners, told a webinar.
Hitting the 90% target would require 57.7 billion cubic metres of net injections, 25.8 bcm more year on year, or up to 250 extra LNG cargoes, according to analytics firm Kpler.
Based on the current benchmark European gas price of around 41 euros per megawatt-hour, this would be an additional cost of 10.3 billion euros ($11.1 billion) to fill storage sites this year, according to Reuters calculations.
Kpler is forecasting an average gas price of $13.17 per million British thermal units, or around 41.60 euros/MWh over the April 1 to October 31 injection season, up 19% year-on-year.
TARGET MISSED
But few in the market think Europe will meet its target.
"What may happen is that the November 1 target is going to be delayed so it will give more wiggle room or more room to manoeuvre for European importers to meet targets this year," senior LNG analyst Steven Swindells at Poten and Partners said.
Indeed, the European Commission is considering relaxing storage requirements, with the latest proposal suggesting hitting 90% any time between October 1 and December 1 while also accepting lower levels in some cases to ease market pressure.
According to Kpler, EU stores could be 76-78% full by November 1 and still be compliant with likely new regulations, Regalado said.
This would still require an additional 120 LNG cargoes year on year, analysts said.
UKRAINE
Adding to the competition for supplies, Ukraine's gas stores are almost completely empty after attacks by Russian forces have cut domestic gas production.
"We now estimate that Ukraine will need 3-6 bcm of gas imports to fill its storage," Regalado said.
LSEG analyst Yuriy Onishkiv told a webinar that Ukraine would need to import up to 5 bcm, at least 3 bcm of which would have to be supplied in the form of LNG from the United States and delivered to terminals in Poland and Lithuania.
This translates to roughly 30 cargos, based on Reuters calculations.
NO MARKET INCENTIVE
The refilling need has elevated gas prices for the summer, typically a period of low demand used to buy gas for storage.
Summer contracts have even traded at a premium to next winter ones in recent months, and injecting LNG or gas into European storage is not expected to make traders any money, Poten and Partners' Feer said.
"That's certainly going to discourage storage fills unless that market structure changes," he said.
The first signs of such a change are perhaps emerging, with Europe's benchmark forward contracts becoming more expensive than nearer-term ones.
That "signals that we can actually have incentives to inject at some point in the near future," Kpler's Regalado said.
Without such a market-based incentive, governments may need to offer subsidies to ensure stores are refilled, a move previously mooted by Germany.
($1 = 0.9271 euros)
(Reporting by Nora Buli, Editing by Susanna Twidale and Mark Potter)
The article discusses Europe's need for $11 billion in LNG to refill gas storage for winter, with additional imports required for Ukraine.
Due to colder weather and reduced pipeline supplies, Europe needs more LNG to meet its gas storage targets for the upcoming winter.
Ukraine's gas stores are nearly empty, requiring additional LNG imports to meet its energy needs.
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