Oil & Gas News

EU Opens Joint Gas Buying With Eye To Winter Energy Security

EU, European, Gas

By: Reuters – The European Union launched a scheme on Tuesday for European companies to place orders to jointly buy gas, with the aim of ensuring Europe has enough fuel and avoiding a repeat of last year’s record-high energy prices.

Companies have until May 2 to register how much gas they want to buy through the EU scheme, which will exclude Russian gas.

The platform will then collect offers from global suppliers to match the company’s demand.

Matched suppliers and buyers will negotiate gas contracts. The EU will not be involved in these commercial talks.

The EU conceived the joint buying scheme after Russia’s invasion of Ukraine and the subsequent reduction in Russian gas shipments to Europe that drove European energy prices to record levels.

Countries including Spain have suggested joint buying could secure better terms in global gas markets.

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The scheme will cover only around 13.5 billion cubic meters (bcm), out of total EU gas demand of around 360 bcm, but it should help countries to get started on filling their gas storage ahead of peak winter demand.

James Watson, head of the industry group Eurogas, said the scheme was a welcome attempt to prepare for the industry’s and consumers’ energy needs.

EU countries are required to fill gas storage to 90% by November. EU storage is already more than half full – an unusually high level for the time of year, after soaring prices helped to make countries cut their winter energy use. Relatively mild weather also curbed demand.

Brussels wants the first gas deals to be signed over the coming weeks and said it will repeat the tendering process every two months for the next 12 months.

Companies can seek pipeline or liquefied natural gas (LNG) deliveries through the scheme, in relatively small volumes – down to a third of an LNG cargo – to help smaller firms participate.

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