MOSCOW, May 23. /TASS/. Gas injection into Europe’s underground storage (UGS) facilities has slowed significantly in recent days due to a slight drop in temperatures, according to data from Gas Infrastructure Europe (GIE). At the same time, withdrawals have increased and are now nearly on par with last year’s levels. If current trends persist, the EU may only reach its target UGS fill level by late autumn instead of the November 1 deadline. Meanwhile, liquefied natural gas (LNG) imports by EU countries continue at a record pace in May.
According to GIE, gas injection into EU UGS on May 21 totaled 220 mln cubic meters. Withdrawals rose to 78 millimlnon cubic meters. For May overall, withdrawals are 3% lower than a year earlier, while injections are 12% higher. In light of the high consumption rates during the past heating season, the total volume of gas in storage as of early May is only the sixth highest ever recorded for this time of year at 49.6 bln cubic meters, marking a 33% decline from the previous year.
Currently, European UGS facilities are filled to 45.27% capacity, which is 10.92 percentage points below the five-year average for this date and significantly lower than the 67.5% recorded a year ago. Under European Commission regulations, EU countries are required to fill their storage facilities to 90% by November 1 each year. This mandate continues to exert upward pressure on gas prices in the European market. According to TASS estimates, net gas injection into storage this season will need to total at least 61 billion cubic meters to meet the required fill level at nearly 50% higher than last year’s net injection and one of the highest volumes on record.
Earlier, Gazprom forecasted that Europe would face challenges in meeting its winter storage targets. This summer, countries in the region will need increased gas supplies to replenish their reserves. Given limited new capacity coming online, Europe is expected to compete with Asia, where demand is rising, for LNG. The Gas Exporting Countries Forum anticipates that the EU will face significant difficulties in reaching the 90% storage fill target ahead of winter and predicts that summer spot gas prices will exceed winter levels, thereby undermining the economic rationale for storage injections.
Heating season and gas prices
Europe’s heating season ended on March 28, lasting 151 days. During this period, EU countries withdrew more than 74 bln cubic meters of gas from storage. Net withdrawal (the difference between total withdrawals and injections) amounted to around 69 bln cubic meters. This means that cumulative withdrawals from UGS at the end of the heating season were 44% higher than the previous year, while net withdrawals rose by 54%.
This week has been cooler in Europe compared to the previous one. Wind generation accounted for 14% of the EU’s electricity output in both April and May. The average gas procurement price in Europe was approximately $409 per 1,000 cubic meters in April and around $406 in May.
LNG imports
During the recent heating season, Europe imported around 63 bln cubic meters of LNG, making it the third-highest volume on record for this period. Only the two previous winters saw greater volumes of regasified LNG fed into the EU’s gas transmission system from LNG terminals.
April saw the highest LNG import volume in Europe since records began, totaling 12.8 bln cubic meters. Current regasification capacity utilization stands at 53% of its maximum. LNG imports in May are running 36% higher than the same month last year and remain on a record-setting trajectory.