EU Gas Price Soars after Russia Halts Nord Stream Flows

Germany is at phase two of a three-stage emergency gas plan. Phase three would see some industry rationing.

In its race for alternative gas supplies, Germany is rapidly installing temporary liquefied natural gas (LNG) terminals to enable it to receive gas from producers further afield, and it is planning to build permanent LNG facilities.

Norway, a major European gas producer, has also been pumping more fuel into European markets.

“There’s plenty of scope to replace that (Russian) gas with LNG imports for now, but when the weather turns cold and demand starts to pick up in the winter in Europe and Asia, there’s only so much LNG out there that Europe can import,” Mandel said.

The global market for LNG was already tight as the world economy sucked up supplies in the recovery from the pandemic, even before the Ukraine crisis added to challenge.

Klaus Mueller, president of Germany’s Federal Network Agency energy regulator, said in August that even if Germany’s gas stores were 100% full, they would be empty in 2-1/2 months if Russian gas flows were halted completely.

Germany’s storage facilities are now about 85% full, while facilities across Europe hit an 80% target last week.

Although Russian gas has still flowed to Europe via Ukraine, albeit at reduced levels, analysts said those supplies could also become a casualty of the conflict.

“We’re shifting focus to the (gas) … that continues to flow to Europe through Ukraine,” James Huckstepp, EMEA gas analyst at S&P Global Platts, said in a Twitter post, adding it was “only a matter of time…” before those faced disruptions.