Germany Orders State-Owned Gas Importer to Replenish Low Storage Levels
The German government has ordered its state-owned gas importer, SEFE, to replenish unusually low gas storage levels. Chancellor Friedrich Merz's cabinet instructed SEFE to buy and store an additional 8 TWh of natural gas by mid-December. This move is a significant departure from the government's previous reluctance to intervene directly in the market, fearing it could drive prices up further.
Germany's storage facilities are only 58 percent full, while EU-wide they are at 71 percent capacity. The country consumed 864 TWh of gas last year, and the mandated purchases represent just under one percent of annual consumption. This measure aims to bolster reserves but acknowledges that low storage levels are not unique to Germany.
European storage facilities were only 71.54 percent full as of September 29, which is about 15.5 percentage points below the five-year average. The Netherlands and Italy also have low fill levels, while France has high ones. Czech storage facilities are 76.5% full, above the European average.
The current situation is attributed to a combination of factors, including a colder winter, LNG outages in the Persian Gulf, and disruption to shipping through the Strait of Hormuz. The price structure also made it economically unattractive for traders to build additional stocks beyond what was needed to secure contracted customer supplies.