Germany should consider creating strategic gas reserve

(Reuters) - Germany should consider establishing a national gas reserve, the head of the country's network regulator said, following concerns last year that a drop in Russian gas supplies could mean severe energy shortages.

Those shortages have been avoided partly due to mild weather and by conserving gas, but Klaus Mueller, head of the Federal Network Agency, said a strategic gas reserve could guard against a supply crisis on a more permanent basis.

"Apart from the Gas Storage Act, there is no strategic gas reserve in Germany," Mueller, told reporters in Duesseldorf late on Monday, referring to legislation that last year enabled state-led gas purchases in global markets to avoid shortfalls.

Mueller said he was drawing on positive experiences from an unrelated, long-established crude oil reserve in Germany.

Under its membership of the International Energy Agency (IEA), Germany has been able, in the past, to tap its mandatory oil reserve when there have been global supply disruptions such as drought affecting riverborne oil barge transports.

Before Russia's invasion of Ukraine, Germany's utility industry had dismissed proposals to set up a gas reserve, saying that its long-term contracts with Russia were a guarantor of supply, while creating a reserve could signal tightness to the market and drive up prices.

Mueller said although there were no immediate gas supply shortages for this winter, the coming winter season of 2023/24 created new worries.

Ideally, market forces would ensure that further savings were made and inventories replenished.

"If that is not the case, maybe we need a new storage law," he said. The 2022 act will expire in 2025.

(Reporting by Tom Kaeckenhoff, writing by Vera Eckert, editing by Matthias Williams, Miranda Murray and Jane Merriman)

• Most Read
• Most Commented