The cost of replenishing the EU’s gas storage facilities after a cold winter, which depleted its reserves, is set to increase by at least €10bn compared with the previous year, reported the Financial Times.

This increased expenditure is necessary to meet the EU’s mandate of refilling storage to 90% capacity each summer, a policy implemented following Russia’s invasion of Ukraine in 2022 to mitigate disruptions during cold months.

Following this winter, Europe’s gas reserves were two-thirds depleted by March, necessitating considerable effort and expenditure over the summer to replenish them to standard levels.

Allianz Trade analyst Ano Kuhanathan noted that Europe experienced its first true winter since the conflict in Ukraine, with a shortfall in wind-generated renewable energy also contributing to heightened gas consumption.

Although current gas prices are lower due to reduced demand from China, Kuhanathan estimated that the cost to achieve the 90% storage target by November will be €26bn, compared with €16bn for reaching 99% capacity last year.

EU nations have recently agreed on a more flexible approach to the gas storage target, responding to criticism that the strict 90% threshold led to summer price surges as countries hastened to fill their reserves.

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Potential revisions to the legislation could see the target lowered by 7%, introducing uncertainty into this year’s refill strategy, with the amendments likely not in effect before summer.

Eurogas, the representative body for the gas industry, stated that policymakers must guarantee clear and timely communication regarding the measures, adding that storage obligations pose the risk of further intensifying the issue of high and volatile wholesale gas prices.

Kuhanathan highlighted that the EU’s gas and liquefied natural gas (LNG) imports amounted to roughly €100bn in 2024, underscoring the importance of ample reserves in stabilising prices and avoiding market competition during winter demand spikes.

Equinor Gas Trading vice-president Peder Bjorland stated that Europe would face higher costs to secure gas over the summer, competing against China and other Asian consumers.

China, the world’s leading purchaser of LNG, has recently reduced its gas imports due to favourable weather conditions and a less optimistic economic outlook.

However, a temporary ceasefire in the trade conflict between Beijing and Washington, announced this month, may lead to an increase in economic activity and, consequently, gas demand, the report stated.

Last week, Bjorland said that Europe may need to uphold competitive pricing to secure the additional 30 billion cubic metres of LNG necessary to replenish its gas storage levels.