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Officials Seek Greater European Solidarity on Winter Gas Supplies

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European countries will need to show solidarity in order to survive the 2023-2024 winter as gas and LNG shortage will continue to prolong the energy crisis in the continent, panelists at the 2022 Energy Intelligence Forum said Wednesday.

“I think we may just be able to dodge the bullet this winter if it's warm because we started with full storage”, Marco Alvera, CEO of Belgian hydrogen firm TES, said during a panel discussion on winter supply challenges.

But next winter is likely to be another story entirely, and Alvera argued that next winter Europe — or at least some European countries — will need to agree on solidarity measures on consumption, “at least on the household level”.

“I cannot think of a European country burning gas to make steel and the neighboring country not having enough gas to keep the lights on and keep the houses warm,” he said.

Patrick Lammers, member of the management board at Germany’s E.ON, highlighted that the crisis has disrupted the European market and has accelerated the energy transition, which in turn is going to make the energy more expensive than “it has been for a long time.” He and others said that is why countries will need to work together to assure access and reliability.

Different Forms of Solidarity

Dora Zombori, Hungary’s deputy state secretary for energy security at the ministry of foreign affairs and trade, noted that “the notion of solidarity has many different meanings,” and argued that there must be a better understanding “why certain countries are saying things that they are saying.”

Hungary, along with other EU nations, has been against imposing a price cap on Russian gas imports, and the country signed up for additional volumes from Gazprom on top of its term supply contract with the Russian exporter for 15 years, which was signed last year.

Following the gas crisis of 2006 and 2009, Hungary had built up its underground storage capacity to 6.3 billion cubic meters, constructed interconnections with most of its neighbors, and its state-run utility MVM has booked regasification capacity at Croatia’s Krk LNG terminal.

“But my question is, where is the molecule ...coming in?” asked Zombori, referring to the lack of alternative supply to Russian gas arriving to Central Europe.

The North-South Gas Corridor, which effectively links Lithuania’s Klaipeda LNG terminal with Croatia’s Krk terminal through various interconnections, gives Hungary access to the Lithuanian, Polish and Croatian terminals.

This in theory would allow Hungary and other countries in the region to receive LNG from different sources and diversify their supply portfolios. However, combined the three terminals regasification capacity totals 13 billion cubic meters per year, according to Zombori, which is very limited considering that Hungary’s annual gas consumption alone stands at 10 Bcm.

“I believe it’s about the availability of volumes, the availability of capacity, and the price right now. And we are struggling with all of these,” Zombori said.

Topics:
Gas Supply, Gas Demand, Gas Inventories, Gas Pipelines, Gas Prices, LNG Demand, LNG Trade, LNG Supply, Regasification, ENERGY INTELLIGENCE FORUM 2022
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