German energy company SEFE increases gas storage to ensure winter reserves

SEFE, the German state-owned company that owns SEFE, said Wednesday it has independently increased its natural gas storage levels. This comes as Europe enters winter with lower inventories than in recent years.

Germany and other European countries are scrambling for a way to replenish their depleted gas reserves before the winter months. Middle East supply disruptions tighten up the global market, pushing up prices and costs.

An earlier government source said that Katherina Reiche, the economy minister, would use market incentives in order to boost gas storage while avoiding direct state purchases which have historically pushed up prices.

Source: The government also agreed that state-owned utilities Uniper and SEFE would?make full use of their storage capacities'.

SEFE, the gas importer and operator of around a quarter Germany's gas storage capacity, announced that it "took an independent commercial decision" to fill its booked capacity.

Uniper stated that it would be in constant discussions with the market and the authorities but would make the final decision on how its storage assets would be used. The company added this would only happen on the basis "of economic criteria".

GAS PRICES HIGHEST EVER SINCE DECEMBER 2022

This week, European gas prices hit their highest level in nearly four years. The reason was the failure of diplomatic efforts to open up the Strait of Hormuz. Through this strait, a fifth of world oil and gas supply had passed before the Iran War.

According to the storage association INES the German 'gas storage sites' were 53% full at the beginning of September, the lowest level since records began 15 years back. The government maintains that the market should fill the caverns, and not political intervention.

If the situation worsens, the Economy Ministry is prepared to take targeted measures to ensure gas supply security.

It said that "as a principle, winter preparation is the responsibility and obligation of the market.?Energy utilities must fulfill their obligations."

Uniper's gas trading business has?already stocked more gas than other players on the market, adding that it will meet its supply obligations under difficult market conditions like a particularly harsh winter.

(source: Reuters)