The European Union's Energy Commissioner has urged member states to start filling gas storage as early as possible to avoid competition for supplies that could cause prices to spike over the summer as the bloc seeks to mitigate the effects of war with Iran.
Governments should also lower their storage fill targets to 80% and make the most of the flexibility offered by EU law, EU Energy Commissioner Dan Jorgensen wrote in a letter seen by Bloomberg News.
Countries can deviate from this 80% target by 10 percentage points, and another five percentage points are possible under unfavorable market conditions. Countries have until December 1 to fulfill their gas storage obligations.
“Security of supply remains relatively protected at this stage due to the limited reliance on imports from this region and LNG cargoes that passed the strait of Hormuz before the conflict,” Jorgensen said in the letter to member states. “But, as a net energy importer on global markets, the resulting high and volatile global prices may also impact the EU gas storage injections.”
The letter, previously reported by the Financial Times, comes in the wake of recent Iranian attacks on Qatar's LNG production facilities, which are expected to take up to five years to repair. Although the EU gets a relatively small share of its gas from the Middle East, it is facing increasing competition on the global market and prices in Europe have risen sharply.
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