The gas price has started a cautious decline. The price on the TTF is now at the level of before the Russian invasion of Ukraine. However, the concerns about the gas supply for the coming winter have not yet disappeared. For European (energy) companies, it is navigating to pump enough gas into the storage between sanctions. In the Netherlands, there is even talk again about extracting gas in Groningen, despite the associated risks.
The gas quotation has fallen from €94 per MWh on May 31 in a steadily downward trend to €78,55 per MWh today while writing this article. The market has not been at this level since the end of February. Apparently, concerns about the European gas supply have been pushed into the background. Several experts warn that the problems are far from solved.
European gas supplies are slowly but surely being replenished. It is a challenge for buyers on the market to ensure sufficient supply amid all the import regulations surrounding gas from Russia. Part can be absorbed by LNG deliveries. However, a significant part of European gas demand is still met with Russian gas via goat paths.
Extreme scenarios
Last winter and spring, the relatively mild weather ensured that there were no acute gas supply problems. According to experts, we cannot assume this for the coming winter period. The Mining Council took an advance on this. In an advice to the cabinet, it advocates preparing Groningen for a reopening of the Groningen gas field. In addition, the independent advisory council states that Dutch gas storage facilities should not be filled to at least 80% next autumn, but to 100% as a matter of urgency. "The corona crisis has taught us that it is necessary to take extremes into account," the Mining Council writes in the advice. "In the eyes of the Mining Council, the use of the Groningen field to fill the storages and as an emergency measure is a realistic option to consider and prepare. It must be clear how much production is needed in the different scenarios to achieve the to fill gas storage areas as much as possible, and how much gas can be extracted from the Groningen field (with flat extraction) within the applicable safety standards."
Rob Jetten, Minister for Climate and Energy, and Hans Vijlbrief, State Secretary for Mining, insist that the extraction of additional gas from Groningen is a last resort. According to the ministers, gas extraction in Groningen should stop completely in 2023 or 2024. In doing so, they go against the advice of many experts.
Tank terminal company Vopak announced today that it will invest more in gas storage. The company wants to invest €2030 billion in industrial and gas terminals by 1 and a further €1 billion in new energy sources and sustainable raw materials. The share of storage capacity for oil and the chemical sector within the company will therefore gradually decrease.