Europe unlikely to face gas shortage even during very cold winter, analysts say

Even unusually low temperatures during the coming winter are unlikely to cause a gas shortage in Europe, energy analysts have said. “Even in the event of a very cold winter, gas storage and additional liquefied natural gas (LNG) can together ensure sufficient supply with Europe having built enough regasification capacity,” said a report by Independent Commodity Intelligence Services (ICIS).

Following an analysis of 8 weather scenarios, the analysts concluded they “do not see supply concerns being a major risk” in any of them.  

ICIS said storage in their most extreme scenario representing a very cold winter would deplete to 20 percent, a level last observed in 2018. “However, since next summer is likely to see a much looser LNG market with new liquefaction capacity coming online, ending the winter with heavily depleted storage is not necessarily a problem,” the analysts said.

However, the report also said that wholesale gas prices could differ substantially between a very cold and very mild winter due to "the dynamics of global LNG. "Especially from December onwards, cold snaps exacerbate an already tight LNG market, which results in prices moving strongly up as Europe and Asia compete for scarce supplies. 

In Germany, gas storage facilities are less than 80 percent filled, but market observer also did not anticipate a risk to supply security. “In Europe – and also in Germany – we meet a large part of our demand at any time, including in winter, from imports from various sources and only partly from storage facilities,” Franziska Holz from the German Institute for Economic Research told the Science Media Centre (SMC).

“With regard to imports, especially from Norway and in the form of LNG, I cannot foresee any restrictions in the coming months that would jeopardise the natural gas supply,” Holz said.

“Despite lower storage levels in Germany, the gas supply situation in Europe and Germany can currently be considered stable,” said Jochen Linßen from the Institute of Climate and Energy Systems.

In September, the German Gas and Hydrogen Industry association also said that "supply security is guaranteed for the coming winter."

Following the halt of direct gas deliveries from Russia to Germany in August 2022, in the aftermath of the country’s invasion of Ukraine, Germany scrambled to find alternative sources to fill its storages to avoid gas shortages. The country has since increased capacities for alternative imports by setting up LNG import infrastructure, and put emergency plans in place. The EU is currently negotiating legal proposals to phase out all Russian oil and gas by January 2028.