Dutch Gas Storage Levels Hit Lowest Level in Years

Dutch Gas Storage Hits Decade Low, Raising Concerns Over EU Energy Supplies

Current Status and Implications of Dutch Gas Storage Levels

Record Low Storage Levels

AMSTERDAM, March 25 (Reuters) - Gas storage levels in the Netherlands dropped to 5.8% of capacity on Tuesday, their lowest level in at least a decade, and it is unclear how quickly they can be refilled over the summer, Dutch gas company Gasunie said.

Supply cuts linked to the war in the Middle East and the soaring prices they have triggered make it "uncertain" whether market participants will bring stores to required levels by November.

"Current prices do not make it obvious that companies will start buying gas in time," Gasunie said, as high prices make it unattractive to buy gas and then store it.

Comparison with European Union Storage

Lowest in the EU

Dutch gas storage levels are the lowest in the European Union, far below the average of 28%, according to Gas Infrastructure Europe data.

EU Response and Recommendations

Commissioner’s Warning and Policy Flexibility

Energy Commissioner Dan Jorgensen last week urged EU countries to start filling stores early ahead of next winter and consider using a flexibility in EU law to reduce their filling targets to 80% of capacity - rather than the official 90% target, a letter seen by Reuters showed.

Concerns Over Price Spikes

Brussels is concerned that a dash to meet the filling target could trigger further price spikes.

Short-Term Outlook for Dutch Gas Supplies

Current Supply Security

There is no immediate concern over gas supplies in the Netherlands, Gasunie said, as liquefied natural gas flows are stable and winter has ended.

Expected Storage Depletion

But the natural gas grid operator said stores will be run down further in the coming weeks, before the filling season starts in April.

Two of the main stores will be depleted altogether by the end of the month, as Gasterra, the gas trader that buys and sells gas on behalf of the Dutch government, winds down operations following the end of gas production at the Groningen field in the north of the Netherlands.

Government Measures and Financial Support

EBN’s Role and Loan Facility

The Dutch government has tasked state-owned energy company EBN with stepping in if other market participants fail to bring storage to required levels.

Last year the government announced a 21.6-billion-euro ($25.1 billion) loan facility to help EBN reach its target.

($1 = 0.8623 euros)

(Reporting by Bart Meijer. Additional reporting by Kate Abnett. Editing by Mark Potter)