Europe Races To Fill Up Gas, Coal Stockpile For Winter

European governments outlined new measures on Monday to cope with potential energy shortages this winter and raced to improve energy networks to share power, with Russian gas flows still running at severely reduced rates amid the Ukraine war, Miranda Murray, Rachel More, and Tassilo Hummel reported for Reuters.

Photo Insert: An LNG ship of German company, Uniper

Germany said it was expecting to sign liquefied natural gas (LNG) contracts in the United Arab Emirates (UAE.) With the major Nord Stream 1 pipeline to Russia shut, it is planning to build new LNG terminals to ship in gas, while European partners Spain and France were also working on contingency plans.

“If everything goes well, savings in Germany are high and we have a bit of luck with the weather, we ... have a chance at getting through the winter comfortably," Economy Minister Robert Habeck said after a tour of a future LNG terminal in Lubmin in northern Germany.

Habeck said Germany will not let large gas importers like VNG become insolvent, while an economy ministry spokesperson said "focused" discussions on aid were ongoing with ailing importer Uniper.

Russia, which had supplied about 40% of the European Union's gas before its February invasion of Ukraine, has said it closed the pipeline because Western sanctions hindered operations. European politicians say that is a pretext and accuse Moscow of using energy as a weapon.

German buyers briefly reserved capacity on Monday to receive Russian gas via the Nord Stream 1 pipeline, once one of Europe's major gas supply routes, for the first time since the line was shut three weeks ago. But they soon dropped the requests. UK’s The Telegraph and Euronews also reported about the energy crunch.

European gas storages are now 85.6% full, with stocks in Germany close to 90%, data from Gas Infrastructure Europe showed.

Europe's imports of thermal coal in 2022 could be the highest in at least four years, analysts said and could reach about 100 million tons, the most since 2017, according to Noble Resources International Pte Ltd., while commodities pricing agency Argus expects shipments to reach a four-year high.

"Europe is going back in time," Rodrigo Echeverri, head of research at Noble, told a conference. Oil prices fell by more than 1% on Monday, pressured by expectations of weaker global demand and by US dollar strength ahead of a potentially large interest rate hike, though supply worries limited the decline.

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