BAKU, Azerbaijan, Jan.14
By Leman Zeynalova – Trend:
A new EU strategic storage policy will require an overhaul of regulations which significantly vary from country to country, Trend reports with reference to Wood Mackenzie.
“Places such as Italy and Hungary already have well-established strategies to supply the market in the event of a supply shortage, others do not. Therefore, a framework is required to ensure consistency across the industry,” the company said in its latest analysis.
Wood Mackenzie notes that over the last two years the importance of gas storage in Europe has been demonstrated to the full.
“In 2020, storage was able to absorb a large excess in supply whereas in 2021, extremely high gas pricing discouraged the injection of gas through summer leaving the region with historically low inventories for the winter. Exceptionally cold weather in the Northern Hemisphere could again leave Europe with a supply deficit. Questions are being raised about the importance of having gas storage in the overall mix of sources, and how storage operators and owners should be rewarded in the future,” the report reads.
In the last decade, Europe has been moving away from long-term oil-linked contracts towards hub pricing and spot market. But the current crisis has shown that this path can have drawbacks - security and affordability of supply foremost among those which could impact the region.
About 49 bcm of import contracts into Europe will expire this year. Out of these, 21 bcm will be Russian piped contracts. Some of these will not be extended such as PGNIG’s 10 bcm contract with Gazprom as Poland moves away from Russian gas.
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