German gas tank filler THE targets buffer to avoid squeeze next winter
FRANKFURT — Trading Hub Europe (THE), tasked with filling Germany’s gas storage facilities, aims to maintain a buffer come spring to try and avoid a supply squeeze ahead of next winter even as it continues withdrawals from the tanks, one of its bosses said.
THE has so far spent around 9.3 billion euros ($10.1 billion) on buying around 50 terawatt hours to fill a quarter of Germany’s underground gas storage facilities, making it a key player in the country’s efforts to replace Russian gas and keep Europe’s top economy going.
“We have to plan carefully,” Torsten Frank, one of THE’s managing directors, told Reuters, adding it was not possible to predict weather patterns, global demand or trading behavior. “Therefore, future tightness scenarios cannot be excluded.”
Frank said that gas would continue to be withdrawn from tanks in coming weeks, which are still well within Germany’s heating season, but that current levels were high enough to get the country to the northern hemisphere spring.
German gas caverns, which can hold 23 billion cubic meters (bcm) or enough for three months of usage, are currently 80.4% full, way higher than the 35% a year ago.
Still, THE is not planning to run down the stocks for April as next winter is a concern, Frank said, adding that having a certain storage buffer at the start of spring was an upfront provision for the 2023/24 winter season.
THE – whose owners include gas grids Gascade, Open Grid Europe and Gasunie – started in 2021 administering feed-in and withdrawals of gas in a unified national zone on behalf of pipeline grid companies under the watch of the energy regulator.
That function was expanded in last year’s supply crisis to implement emergency measures.
THE is able to access both the EEX bourse’s spot and gas futures markets as well as platform Enmacc to procure and release the stored gas under public governance and relevant laws which run to March 2025, Frank said.
It employs 15 people on the gas acquisition team and has dedicated other staff to interacting with authorities and counterparties.
The efforts had all worked well despite criticism that THE overspent by buying large gas volumes during last summer’s price rally, Frank said.
The European gas benchmark contract for the front month at the Dutch TTF hub soared to as much as 343 euros per hour (MWh) in August, but is now trading just under 60 euros/MWh.
“In this discussion, however, it should be noted that THE does not act as a classic trader. It is not our job to buy and sell gas volumes for profit,” he said. “The focus is clearly on security of supply.” ($1 = 0.9192 euros) (Reporting by Vera Eckert, Christoph Steitz, Nora Buli and Tom Kaeckenhoff; Editing by Emelia Sithole-Matarise)
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