Europe well placed for next winter’s gas supplies, says Energy Commissioner Kadri Simson



Europe is well positioned to get through the next winter without Russian gas supplies, European Commissioner for Energy Kadri Simson said on Wednesday, responding to expressions of concern about growing competition for supplies and renewed threats from Moscow.

Addressing an energy security conference in Poland’s capital, Warsaw, Simson said that Europe and its energy infrastructure are “in good position to enter this winter with confidence”.

Simson quoted the growing availability of import terminals to facilitate seaborne deliveries of liquefied natural gas, with five regas facilities scheduled to be commissioned this year to increase the availability of liquefied natural gas at the continent.

She also underlined the European Commission’s success in reaching an agreement with European Union member states to extend the past year’s 15% reduction in gas consumption until March 2024 and also urged them to continue with their efforts to build new gas supply sources and routes.

These measures are expected to keep the healthy balance [between the gas supply and demand] while the “uncertainty remains”, Simson said.

Though the EU has not directly sanctioned imports of Russian gas to the bloc, Simson reiterated her call to member states and European companies to step up efforts to cease purchases of Russian LNG and not to sign any new LNG supply contracts after the expiry of existing ones.

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“We should get rid of Russian LNG as soon as possible bearing in mind the security of supply”, Kadri said, referring to previous excessive dependence on Russian gas supplies by some European states.

“We will never again go to vulnerable position we found ourselves in February 2022”, she added.

Europe currently receives Russian cargoes from the Novatek-led Yamal LNG project in West Siberia and also the Vysotsk LNG project on the Baltic Sea. Another export facility on the Baltic Sea, owned by Russian giant Gazprom, Portovaya LNG, was commissioned in the second half of the last year.

All three projects ran above their nameplates capacities as they sent more cargoes to Europe after Gazprom had reduced its pipeline gas shipments to the continent by two thirds in the second half of last year.

The Russian gas giant released intimidating statements this week, predicting that European suppliers will face an uphill struggle in finding over 40 billion cubic metres of gas to put into underground storage later this summer to reach safe levels ahead of the next winter season.

Gazprom said “politically motivated decisions to stop Russian gas pipeline imports” and “competition” on global LNG markets would undermine European efforts to reach storage targets.

Opportunities

Speaking at the same conference, senior fellow at Brussels-based think-tank Bruegel, Georg Zachmann, said that next several months may be an opportunity for Europe to step up investments in energy efficiency in order to reduce gas demand on the continent.

Arguing that it should be “easier in principle” for LNG imports to cover European gas demand next winter he warned that a prolonged cold spell may require member states to implement higher than the 15% agreed reduction in their gas consumption.

“In the worst-case scenario, Europe may have to reduce gas consumption by 28% against the pre-war level,” Zachmann said.

“We need to make sure we also ramp up investments into renewable energy sources this year… Every kilowatt we install this year, is much more valuable than a kilowatt installed in two or three years,” he said.

Zachmann also spoke out against price regulations. Sticking to free market principles is the best way of ensuring that member states cam receive gas from alternative sources , Zachmann said.

He has also called for European politicians and companies to look into an option of putting some gas into Ukraine’s vast underground storage this year, so this gas may be of help to member states in the event of cold winter.

Earlier, officials in Kyiv said that the country may be capable of lending up to 10 Bcm of its gas storage capacity in the west of the country to European gas suppliers.