Denmark still in dialogue with EC on missing EU gas storage target

Denmark is still in talks with the European Commission regarding its gas storage obligations after it failed to hit the required filling target ahead of the current winter, the Danish Energy Agency said Jan. 10.

Denmark initially missed the EU-mandated target of 90% storage fullness by Nov. 1 and then was given until Dec. 1 to reach the target, which it also failed to reach.

As of Dec. 1, Denmark's storage sites were filled to just 66.4% of capacity, according to data from Gas Infrastructure Europe.

"Denmark is in dialogue with the European Commission regarding gas storage levels and the factors influencing the achievement of filling targets for Danish gas storage facilities," the DEA told S&P Global Commodity Insights.

"The European Commission has set gas filling level targets for all EU member states for February, May, July, and September of this year. Denmark's next target is 45% by Feb. 1," it said.

Danish storage was filled to 58.5% of capacity as of Jan. 8, according to GIE data.

EU rules

Under the EU's gas storage regulation adopted in June 2022, mandatory storage targets are set for member states including interim filling levels that should be reached.

Under the rules, if a member state shows a "substantial and sustained deviation" from the filling trajectory, the EC issues a recommendation on measures to be taken after consulting with the state in question and the Gas Coordination Group.

The regulation states that in deciding which measures to take, the EC should take into account the "specific situation of the member state concerned".

This includes the size of the storage facilities in relation to domestic consumption, the importance of the storage facilities for supply security in the region and any existing LNG storage facilities.

The DEA said the delayed restart of production at the Tyra gas field and planned maintenance work through September on the Baltic Pipe from Norway contributed to the slow storage injections in Denmark.

In fact, Denmark mostly net withdrew from its gas storage sites through September due to the work at Nybro, the entry point for Norwegian gas into Denmark via the Baltic Pipe.

The country had been counting on full production from the newly redeveloped Tyra offshore gas field, but technical issues delayed the ramp-up of production.

Denmark's gas storage capacity was also increased by around 6% over the summer, meaning that the same quantity of gas now accounted for a smaller portion of the total capacity.

The EU as a whole reached the 90% target on Aug. 19, well ahead of the Nov. 1 deadline, with all member states having broken through 90% at the national level, apart from Denmark and Latvia.

However, under the gas storage regulation, certain filling obligations are limited to avoid a disproportionate impact on member states with significant storage capacity, including Latvia.

Tyra output

Output from Tyra alone is expected to exceed Denmark's gas demand when full production is reestablished later this month.

Tyra resumed production in March 2024, having been taken offline for redevelopment work in 2019.

But technical issues were identified soon after in April, with TotalEnergies having since undertaken several actions to resolve the issues to bring the field back to technical capacity and reach plateau production.

"We have been ensuring additional supply of gas to Denmark from the start of the winter season," Ole Hansen, managing director at TotalEnergies EP Denmark, said on Dec. 19.

"Due to minor operational occurrences and the impact of rough North Sea conditions on weather-dependent activities, we now expect to reach plateau production in the second half of January," Hansen said.

With plateau production of 2.8 Bcm/year, Tyra is expected to play an important role in ensuring energy security and independence for Denmark and Europe.

It comes as European gas prices remain relatively high. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Jan. 9 at Eur45.01/MWh.

The redevelopment of Tyra was necessary due to the natural subsidence of the chalk reservoir at the field after many years of production.

Denmark turned to imports from Germany in 2019 when Tyra was taken offline and continued to import via Germany to help offset the loss of Russian gas in 2022 after Gazprom halted deliveries to Denmark's Orsted in June of that year.

Denmark also has significant biogas production capacity, which can meet some 25% of its gas demand and can now also import Norwegian gas into Nybro following the startup of the Baltic Pipe in late 2022.