The European Commission March 23 proposed new rules on minimum gas storage obligations, saying storage sites in the EU would have to be filled to 80% of capacity by Nov. 1 this year, before rising to 90% in subsequent years.
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The EC said it also stood ready to create a task force for joint gas purchases at EU level, and also adopted a communication setting out the options for market intervention at European and national levels as part of efforts to tackle high energy prices.
"Global and European energy markets are going through turbulent times, particularly since the Russian invasion of Ukraine," EU energy commissioner Kadri Simson said in a statement.
"Europe needs to take swift action to ensure our energy supply for next winter, and to alleviate the pressure of high energy bills on our citizens and businesses."
Low stock levels across Europe and the need to refill them over the coming summer have contributed to record high gas prices.
Day-ahead gas on the benchmark Dutch TTF hub was priced at Eur212/MWh ($232/MWh) on March 7, an all-time high and 230% higher than the start of 2022, according to Platts price assessments by S&P Global Commodity Insights.
European storage sites were filled to 77% of capacity last summer, and storage facilities were 25.6% full as of March 21, according to data from Gas Infrastructure Europe.
The EC said its legislative proposal published March 23 would require member states to ensure their underground gas storages were filled to at least 80% of capacity by Nov. 1, 2022, rising to 90% for the following years, with intermediary targets from February to October.
"Operators of storage sites should report the filling levels to national authorities and member states should monitor the filling levels on a monthly basis and report to the Commission," it said.
The EC said storage sites should be filled to 63% of capacity by Aug. 1 this year, and to 68% by Sept. 1 and then 74% by Oct. 1.
Analysts see the 80% target by Nov. 1 as achievable, especially as it is less strict that an original draft target of 90% full by Oct. 1.
"The new 80% fullness target by Nov. 1 is considerably more lenient than the initial proposal," S&P Global Commodity Insights analyst Jake Horslen said.
"We think there is a good chance that stocks will overshoot this mark, given the expected strength in Norwegian production and as high prices continue to attract LNG to Europe," Horslen said.
The main challenge would be filling stocks to 63% by Aug. 1 as this implies a stronger injection rate than the five-year average, he said.
But, if that target is hit, reaching 80% by Nov. 1 would be "very achievable" as the required injection rate for August-October would be slightly slower than the five-year average.
"We therefore see some downside risk to prices in the third quarter and expect to revise our LNG import forecast lower in our next monthly update," Horslen said.
The EC also said gas storage facilities were "critical infrastructure" for ensuring security of supply, and as such proposed a new mandatory certification of all storage system operators.
That, it said, would avoid potential risks resulting from "outside influence" over critical storage infrastructure, meaning non-certified operators would have to give up ownership or control of EU gas storage facilities.
"In addition, for a gas storage facility to close down its operations it would need to have an authorization from the national regulator," it said.
These rules are likely being proposed to address concerns over the fact that subsidiaries of Russia's state-controlled Gazprom operate a number of gas storage facilities in Europe, including Rehden, Katharina, Jemgum and Etzel in Germany and Haidach in Austria.
As an incentive for the refilling of EU gas storage facilities, the EC said it was also proposing a 100% discount on capacity-based transmission tariffs at entry and exit points of storage facilities.
The EC also said partnerships with third countries to collectively purchase gas and hydrogen could improve resilience and bring down prices. "The EC stands ready to create a task force on common gas purchases at EU level," it said.
"By pooling demand, the task force would facilitate and strengthen the EU's international outreach to suppliers to help secure well-priced imports ahead of next winter," it said.
"The task force would be supported by member states representatives in a steering board. A joint negotiation team led by the Commission would hold talks with gas suppliers, and would also prepare the ground for future energy partnerships with key suppliers, looking beyond LNG and gas."
The EC has also been working on options for preventing "contagion" of high gas prices on electricity prices.
"The EC has brought forward its work to feed into this week's meeting of the European Council and presented today a communication setting out those options," it said.
EU leaders are due to meet in Brussels over March 24-25, with energy high on the agenda along with the war in Ukraine.
The EC said several options for emergency measures to limit the impact of high electricity prices had been put forward by member states.
"However, all options on the table carry costs and drawbacks," it said.
"There is no single easy answer to tackle high electricity prices, given the diversity of situations among member states in terms of their energy mix, market design, and interconnection levels," it said.
"The EC is laying out the pros and cons of different approaches for the further consideration of European leaders, and is ready to take forward its work as appropriate."
The options are divided into two broad categories -- intervention options including financial compensation and regulatory options including price caps.
"While many of the options address the symptoms, it is important to tackle the root causes of the current high electricity prices, with collective European action on the gas market," the EC said.
Indicative filling trajectory targets for 2022
* As of March 21 according to GIE data
Source: EC, GIE