EU gas storage levels drop to below 60% of capacity as interim target looms

The EU's gas storage sites are now filled to less than 60% of capacity as the rate of withdrawal from facilities across Europe shows no sign of slowing ahead of the first EU interim filling target date in 2025 of Feb. 1.

According to data from Gas Infrastructure Europe, the EU's gas storage sites were filled to just 58.5% of capacity as of Jan. 21, with stock levels having dropped by 2.5 percentage points over the previous three days.

Cold weather and strong demand for gas in the power sector due to low wind in recent months have seen storage stocks drawn down more quickly than in previous years.

The suspension of Russian gas flows to Europe via Ukraine on Jan. 1 has also added to market tightness and triggered some increased storage withdrawals.

It was in part the expected end of Ukrainian transit that prompted the European Commission in November to raise the Feb. 1, 2025 target for EU-level storage fullness from 45% to 50%.

At the current rate of withdrawals, the EU as a whole will likely end January with storage sites filled to around 50%, in line with the target.

State derogations

The EC in November also published interim filling target trajectories for each member state for 2025.

However, six member states currently benefit from derogations with regard to their gas storage filling requirements.

Five of them -- Austria, the Czech Republic, Hungary, Latvia and Slovakia -- qualify for a derogation because their storage capacity is disproportionately large relative to their consumption.

The Netherlands also has a derogation based on the fact that it exported a certain volume of gas in a reference period from 2016 to 2021 to third countries, which can be subtracted from the storage volume requirement.

For the first five countries, the filling target is set at a volume corresponding to 35% of that country's average annual gas consumption over the preceding five years, with the interim targets also amended appropriately.

In Austria, for example, its average gas consumption in 2019-2023 was 8.2 Bcm/year, according to the Energy Institute's Statistical Review of World Energy.

The country's storage capacity of around 9.5 Bcm is above its average annual consumption.

Applying the 35% rate of consumption means that Austria would only be required to stockpile around 2.9 Bcm of gas in its storage sites -- or 30% of capacity -- to be considered to have met the equivalent 90% filling target by Nov. 1 last year.

As it happened, Austrian storage sites were filled to a peak of 94.6% as of Nov. 3, 2024, according to GIE data, and remain 66.2% full as of Jan. 21.

In the implementing regulation published by the EC in November, the annex adjusted all the targets to the 90% level.

But the member states benefitting from derogations were able to recalculate the intermediary targets, knowing that the 90% target meant a volume of gas in storage that covers 35% of their annual consumption.

Dutch targets

The Netherlands also has lower filling targets than those set out in the EC's November implementing regulation.

Instead of a 47% target by Feb. 1, 2025, the actual target is 39%, according to the country's gas network operator Gasunie.

The relevant targets were also laid out in a letter from the Dutch climate ministry to the Dutch Parliament in late 2024 and show the 2025 targets as 39% (Feb. 1), 32% (May 1), 47% (July 1), 59% (Sept. 1) and 74% (Nov. 1).

While the EC chose to convert the filling target percentages back to 90% in the implementing act, the EC confirmed to the Dutch authorities the fill trajectory as laid out in the letter.

Dutch storage sites are currently filled to 43.1% of capacity, according to GIE data.

Under the EU rules on gas storage, filling levels that are up to five percentage points below the target are also considered to comply with the targets of the regulation.

The EU adopted its gas storage regulation in June 2022 -- requiring member states to meet mandatory storage filling targets -- after EU gas stocks dropped to seriously low levels following the winter of 2021/22.

The EU began the storage injection season in April 2022 with stocks filled to a little over 25% of capacity, largely a result of Russia's Gazprom failing to restock storage sites in Europe ahead of the 2021/22 winter.

The EU regulation is due to expire at the end of 2025, meaning the Nov. 1, 2025, target of 90% fullness at the EU level would be the last binding target if the rules are not extended.

An EC spokesperson said Jan. 17 that it was looking at "various options" to ensure the EU had sufficient gas in storage once the EU's existing gas storage regulation expires at the end of 2025.

Summer-winter spread

There is also concern in the European gas market that current storage economics do not incentivize injections or capacity bookings this summer.

The Summer 25 TTF price remains at a premium to the Winter 25 equivalent, affecting traditional storage economics.

Platts, part of S&P Global Commodity Insights, assessed the Summer 25 TTF contract at Eur48.56/MWh on Jan. 22 compared with a Winter 25 TTF price of Eur44.25/MWh.

German gas market manager Trading Hub Europe on Jan. 21 unveiled plans for a new gas storage product designed to encourage market participants to inject gas into storage sites despite insufficient seasonal spreads.

"The focus of the product concept is to subsidize new injections. The aim is to provide incentives for injections," a THE spokesperson told Commodity Insights.