The latest gas storage auctions in France and Germany reflected the subdued interest in securing inventory capacity for the upcoming winter, as seasonal spreads continue to disincentivize stocking gas into the next winter.
On Jan. 16, France's storage operator Storengy auctioned 2,750,000 MWh of capacity at its Sediane Nord storage for the 2025-26 period, which cleared at 9 euro cent/MWh, the latest data from the operator showed.
The auction opened with a reserve price of Eur0/MWh which attracted a requested capacity of 3,091,150 MWh. Demand settled at 2,759,900 MWh as the auction cleared at 9 euro cent/MWh.
On Jan. 15, the French Saline storage also cleared for as low as 12 euro cent/MWh for 3,000,000 MWh.
Market participants indicated that these storages typically garner significant interest due to their flexibility. However, the lower clearing prices and reduced demand for storage capacity compared to previous years highlighted the unsustainable premium of summer 2025 products over their winter 2025 counterparts.
A year earlier on Jan. 17, an auction for 3,325,000 MWh at Sediane Nord for the 2024-25 period cleared at Eur6.51/MWh, while another at Saline one day before that, cleared for Eur6.34/MWh for 3,550,000 MWh for the same allotted period, Storengy's data showed.
However, some traders still thought that some value could be extracted from storing gas into the next winter if players optimize their strategies correctly, even as the intrinsic value of these inventories was negative.
"It's not necessarily a bad deal. The intrinsic value of the storage is negative yes and there's a lot of costs to cover, but you could possibly extract some extrinsic value from this storage. 9 euro cents for the capacity is not that bad and can be recoverable" a Spain based trader said. "Regardless, you can see that there's subdued demand vs what's on offer."
To optimize storage costs and maintain profitability amid negative seasonal spreads, market participants will seek opportunities during peak demand days in winter 2025, when prices may exceed operational costs, thereby alleviating the impact of negative spreads.
Platts, a part of S&P Global Commodity Insights, assessed the Summer 2025 contract of the French PEG at Eur46.82/MWh Jan. 17, a 52 euro cent/MWh discount to the TTF. The winter 2025 contract was lastly heard to have traded at a 72.5 euro cent/MWh discount to its Dutch counterpart on Jan. 17.
The Dutch TTF Summer 2025 instrument was assessed at Eur47.34/MWh Jan. 17, Eur2.245/MWh higher than the winter-ahead product valued at Eur45.095/MWh.
The next storage auctions in France will start on Jan. 21, where 3,000,000 MWh and 6,000,000 MWh of capacity will be sold at Saline and Sediane B, respectively, for the 2025-26 period, the latest data from Storengy showed.
Germany's Rehden
SEFE Storage offered 5 TWh of storage capacities for the storage year 2025-26 on Jan. 16 at the Rehden underground gas storage facility, EU's largest. The firm working gas volume was offered in 400 bundles of 111 GWh each, with no variable fee charged.
SEFE was unable to allocate any capacities for the storage year 2025-26 during the Rehden storage auction, the company's Jan. 16 press released said.
"The challenging market environment does not facilitate the economic marketing of free capacities for the storage year 2025-26," the press released said.
With the inversion of the summer-winter spread, booking storage capacity was viewed as commercially undesirable, market sources said.
On Jan. 16, German THE Summer 25 contract was priced at Eur47.30/MWh, a premium of Eur1.77/MWh to its Winter 25 contract.
"The Rehden storage auction didn't manage to sell any capacity," a European gas trader said.
Lack of interest in the Rehden storage auction begs the question of how said capacities would be filled ahead of the next gas winter, ensuring energy supply security as the market continues to readjust to the loss of the Russian gas supplies that triggered the 2022 Energy Crisis.
Looking back at 2024 Rehden auctions, Astora Gmb (which was renamed to SEFE Storage from May 31, 2024) successfully sold all marketed storage capacity over several 5 TWh auctions for storage year of 2024-25.
