in Freight News

18/04/2025

Meeting EU gas demand this summer and refilling storages to 90% will only be feasible if LNG imports increase by around 20% above 2024 levels and pipeline supplies operate at a high level, European regulatory body ACER said April 16.

In a market outlook, ACER also warned that unfavorable seasonal spreads could deter summer storage injections amid ongoing EU discussions around more storage target flexibility.

Under current EU rules, member states are required to fill their storage sites to 90% of capacity by Nov. 1, though a handful of countries have derogations from the target.

ACER said that achieving the 90% target would require “large” LNG imports, adding that LNG supply was assumed to average 10 Bcm/month — in line with 2023 trends and 22% higher than last year.

“Part of these extra volumes have been already contracted to offset the drop in Ukrainian Russian pipeline flows,” ACER said.

Storage levels

The EU ended the past gas winter on March 31 with storage sites filled to just 33.8% of capacity, according to data from Gas Infrastructure Europe.

Refilling storage this summer could be complicated by current storage economics, ACER said.

“While the market has been highly volatile, summer 2025 prices have consistently exceeded winter 2025/2026 prices in the last months,” ACER said, with the spread peaking at around Eur6/MWh in January.

“Although the spread settled in the last part of the winter, it discouraged injections for summer 2025,” it said.

According to price assessments by Platts, part of S&P Global Commodity Insights, the Q3 2025 TTF price is now trading at a slight discount to Winter 25.

The Q3 2025 contract was assessed on April 15 at Eur34.85/MWh compared with a Winter 25 assessment of Eur35.56/MWh.

But ACER said that while summer prices had reversed to a slight discount, the spread was still thinner than storage costs.

EU target

In its outlook, ACER also listed the pros and cons of maintaining the status quo in terms of the 90% gas storage target.

On the pro side, it said revising the storage targets now would set a “risky” precedent and undermine trust in regulations while creating significant risks for companies that had already made financial commitments.

It added that higher summer prices were necessary to attract sufficient gas this summer and while they may cause some short-term harm, they could help prevent a more severe crisis caused by insufficient storage next winter.

In its list of factors supporting a change in the targets, ACER said lowering the filling target would ease the seasonal spread and reduce summer 2025 prices.

It added that a 90% storage level was less critical in 2025 than it was in the past as gas demand has dropped more than 20% since 2022.

It also said that capacity-based subsidies could be more efficient than commodity support measures.

The European Council on April 11 laid out its negotiating position on the European Commission’s proposal to extend the storage regulation which it published on March 5.

The Council said the 90% target should be reached anytime between Oct. 1 and Dec. 1, instead of the current Nov. 1. deadline.

It also said that intermediary storage targets for each member state in February, May, July and September should be indicative to leave sufficient flexibility for market participants throughout the year.

And, it said, in the event of unfavorable market conditions, member states should be able to deviate by up to 10% from the filling target.

Source: Platts