31st Jan 2023

Next winter's gas looms large at EU summer summit

  • The search for alternative for gas sources is seen by third countries as 'the perfect business opportunity' to gain an important customer over time, said EU commission chief Ursula von der Leyen (Photo: European Union)
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EU leaders on Friday (24 June) discussed how to guarantee enough gas supplies for next winter at a summit in Brussels — amid increased concerns over energy security.

"We need to be prepared to deal with more disruptions in Russian gas deliveries," European Commission president Ursula von der Leyen told a press conference.

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She said the EU executive will present an "emergency-demand reduction plan" in July, adding that all national contingency plans have been revised to ensure that all member states are able to cope with further gas supply reductions or cut-offs.

"There will be no return to cheap fossil fuels [from Russia]," she also said, arguing that the root of the current energy crisis is Europe's addiction to fossil fuels.

As Moscow tightens gas supplies across the bloc, widespread concerns over Russia cutting completely off gas supplies to Europe have increased in recent weeks.

"It is only a question of time when Russians close everything," EU diplomats warned ahead of the summit.

Overall, Russian state-owned energy giant Gazprom has cut off, or reduced, gas supplies to 12 member states.

The Kremlin has turned off supplies to some EU countries for refusing to pay for gas in roubles — including Poland, Bulgaria, and Finland.

But Germany, the Czech Republic, the Netherlands, Italy, Austria, and Slovakia have also faced reduced gas delivery volumes, prompting countries to consider turning back to coal to secure supplies.

Several countries have issued an "early warning" on national gas supply as a precautionary move — notably Italy, Latvia, Croatia, Austria, Finland, Estonia, Denmark, Netherlands, and Sweden.

German gas 'crisis'

Germany on Thursday triggered the second stage of its national gas emergency plan, warning that the country is facing a "gas crisis".

"We are preparing to do what is necessary… to make sure that storage capacities are enhanced," German chancellor Olaf Scholz told a press conference after Friday's summit.

Belgian prime minister Alexander De Croo raised concerns over the situation in Germany ahead of his meeting with EU leaders in Brussels, pointing out that the current gas crisis demands a common approach in the bloc.

"If Germany is already saying today that during the winter they'll have a shortage of gas, the impact will be enormous for Germany but also for all other European countries," De Croo said.

Gas supply disruptions have already triggered a surge in energy prices, fuelling inflation and increasing the burden on the most vulnerable households and businesses.

"The notion of cheap energy is gone … and we are all in the process of securing alternate sources," Latvian prime minister Krisjanis Karins said.

Irish prime minister Micheál Martin, for his part, favoured the possibility of having a common purchase of gas — similar to the Covid-19 vaccine strategy — in order to negotiate and secure better prices with providers.

EU leaders agreed on a proposal to jointly buy natural gas in March, as part of efforts to reduce the EU's dependency on Russian gas and get better prices.

Under the REPowerEU policy, the bloc committed to filling gas storage facilities up to at least 80 percent of their capacity before next winter.

EU gas storage levels are currently above 50-percent capacity, but it is unclear whether the safe threshold will be reached by EU countries if the disruption of supply continues.

"Although there is no immediate security of supply risk, there might be consequences for the refilling of storages for next winter, in case the reduction is prolonged," an EU official told EUobserver.

'Business opportunity'

The EU has been looking for potential alternative sources for gas imports since the beginning of the war in Ukraine, given that Russia's stockpiles account for about 40 percent of all its gas imports.

This situation, von der Leyen said, is seen by third parties as "the perfect business opportunity" to gain an important customer over time.

The EU and Norway agreed on Thursday to increase gas deliveries to Europe.

Earlier this month, an agreement to boost gas exports to Europe was also signed between the EU, Egypt and Israel.

Likewise, the EU has also sought to increase gas supplies from Azerbaijan via the Trans Adriatic Pipeline (TAP) on the Turkish-Greece border. Both parties could sign a gas supply agreement in July with the EU energy commissioner Kadri Simson.

Additionally, liquified natural gas (LNG) imports have jumped by 75 percent compared to last year thanks to, for example, a new agreement with the US, von der Leyen said.


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