German storage operators to Berlin: It's time to act and give gas loans

Operators of German gas storage facilities have called on the German authorities to deal with gas reserves, which remain record low. There are one or two months left before the heating season, and the UGS is a little more than half full.

The Association of Gas Storage Operators INES has proposed to the German government to cancel a number of fees and provide preferential government loans to ensure a sufficient level of filling of storage facilities this winter.

"Current market conditions do not provide sufficient economic incentives to fill gas storage facilities. The price difference between the injection and the selection is currently insufficient to cover the associated costs," INES said in a statement.

They believe that in such an unfavorable conjuncture, it is necessary to cancel the conversion fee and network usage fees at the points of connection to the storage.

"Subsidized government loans can also reduce the cost of financing gas storage. In general, these measures can reduce storage costs by about 1.16 euros per megawatt-hour ($ 14 per thousand cubic meters),"the association said.

In addition, they also offered long-term options (LTO), which can create additional incentives to fill the vaults.

"For reliable gas supply in Germany in winter, well-filled gas storage facilities are needed. Therefore, it is now necessary to reduce costs and create targeted incentives for additional filling. The storage market requires conditions under which security of supply will not become a product of chance. Our action plan combines short—term recommendations with a call to create a reliable economic basis for the long-term preservation of the necessary storage capacities and their reliable filling," explained Sebastian Heinermann, Managing Director of INES.

This year, Germany is part of a group of EU countries that are restoring gas reserves too slowly. By September 3, the country's UGS was filled by only 53%, according to GIE. At the same time, the state-owned SEFE company, which Berlin nationalized from Gazprom, filled its storage facilities, including the largest UGS in Europe, by an average of 33%.

On the one hand, gas prices in Europe have exceeded $ 860 per thousand cubic meters and it is not profitable for traders to stock up on fuel, since winter quotes are still lower than current prices. On the other hand, Berlin itself insists that the market self-regulates. At the same time, the German authorities are afraid of interventions that could lead to a new hype and an even bigger jump in prices.

As EADaily reported, European companies began to increase gas imports in order to reverse the situation with low reserves. However, they do it belatedly. The injection season is nearing completion, while the previous policy of most countries The EU did not provoke prices in the conditions of the Iranian war and did not accelerate the pumping earlier went sideways. Compared to last year, Europe will overpay tens of billions of dollars for imported gas and the Iranian crisis will be only one of the reasons.