SEFE Boosts Gas Storage to Secure German Winter Energy Reserves
Germany's Strategy for Winter Gas Security
By Christoph Steitz and Holger Hansen
SEFE's Independent Action on Gas Storage
FRANKFURT, Sept 16 (Reuters) - German state-owned energy firm SEFE said on Wednesday it had independently increased natural gas storage levels as Europe heads into winter with the lowest inventories in years.
Having weaned themselves off cheap and plentiful Russian gas after the 2022 invasion of Ukraine, Germany and other European nations are scrambling to rebuild depleted reserves ahead of the colder months as disruptions to Middle East supplies tighten the global market and push up costs for consumers and industry.
Government Incentives and Agreements
A government source told Reuters earlier on Wednesday that economy minister Katherina Reiche would use market incentives to shore up gas storage, while avoiding the direct state purchases that have stoked prices in the past.
The government has also agreed with state-owned energy companies Uniper and SEFE that they will make fuller use of their storage capabilities, the source added.
SEFE and Uniper's Storage Decisions
SEFE, a gas importer that also operates around a quarter of Germany's gas storage capacity, said it had "taken an independent commercial decision to fill the booked storage capacity".
Uniper said that while it was in regular discussions with market participants and authorities, the company alone would decide on how to use its storage assets, adding this would happen "solely on the basis of economic criteria".
Market Impact and Gas Prices
European Gas Prices Surge
GAS PRICES HIGHEST SINCE DECEMBER 2022
European gas prices reached their highest in almost four years this week on faltering diplomatic efforts to open the Strait of Hormuz, through which around a fifth of the world's oil and liquefied natural gas supply passed before the Iran war.
Current Storage Levels and Government Response
Germany's gas storage sites were around 53% full in early September, the lowest level for the time of year since records began 15 years ago, according to storage association INES, with the government maintaining that the filling of caverns should be taken care of by the market, not via political intervention.
The Economy Ministry said it is ready to take targeted measures for gas supply security if the situation deteriorates.
"As a matter of principle, winter preparedness is the responsibility of the market and energy utilities must fulfil their obligations," it said.
Uniper's Preparedness for Winter
Uniper said its gas trading business had already stored more gas "than other market players", adding it would meet supply obligations even under challenging market conditions such as a particularly cold winter, and it was suitably prepared.
(Reporting by Christoph Steitz and Holger HansenWriting by Ludwig BurgerEditing by Linda Pasquini and Miranda Murray, Kirsten Donovan)
