Brussels: Europe and the Arabs
The European Union institutions in Brussels announced that the Council of Member States and the European Parliament have reached a provisional agreement on a proposed amendment to the Gas Storage Regulation, which extends by two years the current obligations of member states to store sufficient quantities of gas before winter. This amendment aims to reduce the EU's exposure to price fluctuations linked to geopolitical instability following Russia's war of aggression against Ukraine.
The provisional agreement sets a target of 90% subscription and gives member states additional flexibility to adapt to constantly changing market conditions and address any potential market manipulation.
"Today's agreement represents a strategic victory for our energy sovereignty and Europe's resilience in the face of price manipulation in the gas market. By ensuring sufficient gas storage before winter, we not only protect our citizens and companies from price fluctuations and supply disruptions, but also send a clear message that we will not succumb to external energy pressures." According to a European statement, Marzyna Czarnicka, Polish Minister of Industry, whose country currently holds the rotating EU Presidency, said:
Gas supply security under changing circumstances
The agreement reached today will help member states respond quickly to ever-changing circumstances and benefit from the best purchasing terms, while ensuring gas supply security and the smooth functioning of the internal market. Highlights of the agreement include:
The agreement maintains the current binding target of 90% gas storage, but allows flexibility to reach it anytime between October 1 and December 1, instead of the current deadline of November 1.
The Council and Parliament agreed that the intermediate storage targets are indicative, allowing for predictability of storage levels while providing sufficient flexibility for market participants to purchase gas throughout the year when it is most convenient.
The interim agreement reached with the European Parliament now requires formal ratification and adoption by both institutions.
Thanks to the gas storage targets set in 2022, Europe's energy security situation has improved since the energy crisis triggered by Russia's war of aggression against Ukraine. These gas storage obligations are scheduled to expire at the end of 2025. However, the continued tightness of the global gas market necessitates extending these provisions beyond 2025.
Gas storage facilities cover 30% of the EU's gas consumption during the winter months. Furthermore, well-stocked underground gas storage facilities can help provide additional gas in the event of increased demand or supply disruptions.