Europe may have enough natural gas in storage to stave off an energy crisis during the upcoming winter heating season, an energy consultant group finds. Photo by John Angelillo/UPI | License Photo
Oct. 26 (UPI) -- After months of scrambling, it looks like the economies of Europe will have enough natural gas stored to get through the winter, an energy consultant group said Wednesday.
European economies had relied heavily on Russia for its import streams of crude oil and natural gas. Western-backed sanctions imposed in response to Russia's invasion of Ukraine in February and a general push to diversify the European energy sector created severe supply-side challenges for the region.
Those concerns became particularly severe during the latter half of the year as the European community braced for a tough winter of inadequate supplies. But a report from Norwegian consultant group Rystad Energy finds that, unless winter in the Northern Hemisphere is severe, the EU should be able to get by on what it has in storage.
Rystad estimates storage facilities across the entire bloc are about 93% filled with natural gas, compared with 77% at this time last year. Germany, the economic powerhouse of the European Union, is about 96% full, while Austria and Hungary have their storage levels filled to around 80%, meeting the EU's target for storage capacity.
Prices, meanwhile, are on the decline as well due to supplies catching up with demand. At $28 per million British thermal unit for the EU's benchmark, the Netherlands-based Title Transfer Facility, prices are down about 28% over the course of a week.
Rystad said apart from supplies, the forecast for a relatively mild winter, coupled with increased output from renewable energy resources, is providing some additional relief. Its supplies are more diverse too, with major producers such as Norway, the United States and Qatar filling some of the supply-side void.
Meanwhile, there are some 60 vessels filled with liquefied natural gas waiting off the coast of various European ports ready to unload their cargo. The influx of waterborne supplies is overwhelming the region's ability to warm the LNG back into the gaseous form for use.
Should those vessels sit around for too much longer, they could be rescheduled for other ports. Given European concerns about the availability of natural gas during the winter, however, the build-up of ships offshore could provide a sense of security given the amount of product waiting to come onshore.
An analyst from Rystad, Ade Allen, said earlier this week that the situation in Europe seems to be improving.
"LNG demand in Europe remains high, but market pressures have eased with improvements in storage inventories within the region," he said.