Netherlands Seeks Gas Storage Rule Overhaul Amid $1.14 Billion Bill
The Netherlands is calling for an overhaul of the EU's gas storage mandate after shelling out almost $1.14 billion to build up inventories this summer. Climate Minister Stientje van Veldhoven argues that the current system, which considers storage capacity rather than consumption, places an unfair burden on governments.
The Netherlands is a significant natural gas hub and home to the EU's benchmark gas trading futures market, the Dutch Title Transfer Facility (TTF). The country has spent over $1 billion this summer season alone on building up inventories, which should ideally be done by gas market participants. This comes amid soaring natural gas prices in Europe following the Iran war and limited LNG shipments through the Strait of Hormuz.
The current EU rules have deepened the backwardation structure of European gas prices, where prompt contracts trade higher than those further out in time due to concerns about immediate supply. The Netherlands' gas storage sites are expected to be under pressure this winter, with the country's gas network operator warning that it may miss its target to fill storage sites ahead of winter.