Europe strengthens its winter gas preparedness despite the Ukraine-Russia agreement

Europe makes significant progress in securing its gas supplies for winter, even with the imminent end of the gas transit agreement between Ukraine and Russia.

Share:

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

Europe has made notable progress in preparing for increased gas demand during the winter season, according to a senior official from the European Commission. This preparation is even more crucial as the gas transit agreement between Ukraine and Russia is set to expire in December 2024, ending a key infrastructure for Russian gas deliveries to Europe.

Matthew Baldwin, Deputy Director-General of the European Commission for Energy, emphasized at the LNG Producer-Consumer Conference 2024 in Hiroshima that Europe’s gas reserves are currently 94% full, exceeding the annual requirement of 90%. “We are doing everything we can to ensure preparedness,” Baldwin stated, adding that the current situation is comparable to previous years thanks to ongoing efforts to diversify gas supply sources.

Strengthening storage capacities and diversifying sources

Since Russia’s invasion of Ukraine in 2022, Europe has intensified its efforts to reduce its dependence on Russian gas. This includes increased imports of liquefied natural gas (LNG) from the United States and diversifying suppliers, with Norway becoming the main supplier via pipeline. “We have carried out an extraordinary transformation in our energy supply system,” he affirmed.

Impact of Middle East tensions on gas prices

Despite bearish fundamentals, natural gas prices in Europe have recently risen due to speculation about potential supply disruptions related to conflicts in the Middle East. The one-month contract for the Dutch TTF was priced at EUR 40.695/MWh on October 4, up 2.4% for the day, according to Platts, a subsidiary of S&P Global Commodity Insights.

Demand reduction measures and increase in renewable energies

In addition to diversifying gas sources, Europe has also implemented measures to reduce its energy demand by an average of 18%. “We have taken a number of measures to help control the situation,” Baldwin stated. This includes a record increase in renewable energies in the European electricity supply system, now surpassing gas production.

Future perspectives and market intervention measures

When asked about the continuation of market intervention measures, such as the gas price cap, joint purchasing, demand reduction targets, and storage obligations, Baldwin responded: “We will see. It will be up to the next commission to decide whether to maintain these different measures.”

These initiatives demonstrate Europe’s commitment to ensuring its energy security and proactively addressing the challenges posed by the evolving global geopolitical and economic landscape.

Rockpoint Gas Storage priced its initial public offering at C$22 per share, raising C$704mn ($515mn) through the sale of 32 million shares, with an over-allotment option expanding the transaction to 36.8 million shares.
Tailwater Capital secures $600mn in debt and $500mn in equity to recapitalise Producers Midstream II and support infrastructure development in the southern United States.
An economic study reveals that Germany’s gas storage levels could prevent up to €25 billion in economic losses during a winter supply shock.
New Fortress Energy has initiated the initial ignition of its 624 MW CELBA 2 power plant in Brazil, starting the commissioning phase ahead of commercial operations expected later this year.
Talen Energy launches $1.2bn debt financing and expands credit facilities to support strategic acquisitions of two combined-cycle natural gas power plants.
The Ukrainian government is preparing to raise natural gas imports by 30% to offset damage to its energy infrastructure and ensure supply continuity during the winter season.
Driven by rising electricity demand and grid flexibility needs, natural gas power generation is expected to grow at an annual rate of 4.8% through 2030.
Talen Energy secures $1.2bn term financing and increases two credit facilities to support the acquisition of two natural gas power plants with a combined capacity of 2,881 MW.
Tenaz Energy finalised the purchase of stakes in the GEMS project between Dutch and German waters, aiming to boost production to 7,000 boe/d by 2026.
Sembcorp Salalah Power & Water Company has obtained a new 10-year Power and Water Purchase Agreement from Nama Power and Water Procurement Company, ensuring operational continuity until 2037.
Eni North Africa restarts drilling operations on well C1-16/4 off the Libyan coast, suspended since 2020, aiming to complete exploration near the Bahr Es Salam gas field.
GOIL is investing $50mn to expand its LPG storage capacity in response to sustained demand growth and to improve national supply security.
QatarEnergy continues its international expansion by acquiring 27% of the offshore North Cleopatra block from Shell, amid Egypt’s strategic push to revive gas exploration in the Eastern Mediterranean.
Polish authorities have 40 days to decide on the extradition of a Ukrainian accused of participating in the 2022 sabotage of the Nord Stream pipelines in the Baltic Sea.
The Japanese company has completed the first phase of a tender for five annual cargoes of liquefied natural gas over seven years starting in April 2027, amid a gradual contractual renewal process.
Baker Hughes has secured a contract from Bechtel to provide gas turbines and compressors for the second phase of Sempra Infrastructure’s LNG export project in Texas.
Targa Resources will build a 500,000 barrels-per-day pipeline in the Permian Basin to connect its assets to Mont Belvieu, strengthening its logistics network with commissioning scheduled for the third quarter of 2027.
Brazilian holding J&F Investimentos is in talks to acquire EDF’s Norte Fluminense thermal plant, valued up to BRL2bn ($374 million), as energy-related M&A activity surges across the country.
Chevron has appointed Bank of America to manage the sale of pipeline infrastructure in the Denver-Julesburg basin, targeting a valuation of over $2 billion, according to sources familiar with the matter.
Hungary has signed a ten-year agreement with Engie for the annual import of 400 mn m³ of liquefied natural gas starting in 2028, reinforcing its energy diversification strategy despite its ongoing reliance on Russian gas.

All the latest energy news, all the time

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access - Archives included - Pro invoice

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.