EU to force countries to fill 90% gas storage before winter

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A gas burner is pictured on a stove in a private house in Bordeaux, southwestern France, December 13, 2012. REUTERS/Regis Duvignau

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BRUSSELS, March 22 (Reuters) – The European Commission will propose legislation on Wednesday requiring EU countries to fill their gas storage to at least 90% capacity before each winter, according to a draft document.

The invasion of Ukraine by Russia, the European Union’s top gas supplier, has heightened concerns about supply shocks, even as EU countries have avoided sanctioning Russian fossil fuels. While Europe plans to significantly reduce its dependence on coal, oil and gas this decade in line with climate goals, for now the countries are heavily dependent.

In order to build a supply buffer for next winter, Brussels will require EU countries to fill their storage facilities to at least 90% by November 1 each year, with intermediate targets applying in the previous months.

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“In the current geopolitical context, further disruptions to gas supply can no longer be ruled out. This could seriously harm EU citizens and the economy,” says the draft proposal, seen by Reuters, which will have to be approved by EU countries and the European Parliament. Parliament.

Countries will be responsible for meeting the targets and can use options like requiring suppliers to store minimum volumes, instructing transmission system operators to purchase strategic gas stocks and offering financial incentives to do so.

The Commission will intervene if countries are on the wrong track. It will also remove transmission tariffs on transporting gas to and from storage.

Germany, Italy, France and the Netherlands are among the EU states with large gas storage sites. Others, including Greece and Lithuania, do not.

States without storage must use facilities in other countries or develop “load sharing” systems where they help other countries fill storage, the document says.

EU storage is about 26% full. Companies typically fill it up during the summer when prices and demand drop – but Russia’s invasion of Ukraine, which Moscow calls a “special military operation”, has sent gas prices skyrocketing.

Storage typically covers 25-30% of winter gas consumption, depending on the project.

EU countries must also certify their storage operators – a move aimed directly at Russian gas giant Gazprom (GAZP.MM), which has storage sites in several EU countries, including about a fifth of the capacity of Germany. Gazprom-owned storage levels have been below overall EU levels in recent months.

If country authorities consider a storage operator to be a security risk, they can force it to divest its stakes, possibly in exchange for compensation, the document says.

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Reporting by Kate Abnett; Editing by Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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