The German government on Wednesday ordered a state-owned company to boost gas reserves as worries mount about low storage levels ahead of winter, citing “geopolitical risks” amid the Iran war.
Gas reserves are currently around 58 percent full in Germany, compared to an EU average of some 70 percent, and way below legally mandated levels that Europe’s top economy requires for the winter.
Economy Minister Katherina Reiche “has decided to instruct federally owned company SEFE… to increase natural gas storage”, an economy ministry spokeswoman told AFP.
“The central reason for this step lies in ongoing geopolitical risks.”
European gas prices surged to a three-year high earlier this month, with the Middle East conflict and near-total closure of the Strait of Hormuz disrupting global energy markets.
The continent, which relies heavily on energy imports, has greatly diversified its supplies since Russian gas deliveries collapsed following Russia’s 2022 full-scale invasion of Ukraine.
But disruptions to supplies from the Gulf, and the resulting higher prices on world markets, represent a fresh headache for European governments and businesses.
SEFE (Securing Energy For Europe) was formerly the German branch of Russian energy giant Gazprom but, following the outbreak of the Ukraine war, it was taken into state ownership by Berlin.
The company operates around a quarter of Germany’s gas storage capacity.
The economy ministry said SEFE will decide how much to increase storage by at what stage — and other companies would also be expected to boost their reserves.
“The measures to be initiated by SEFE are also intended as a clear signal to other companies,” the spokeswoman added.
Germany has a target for its main storage facilities to be 80-percent full going into winter but a number of factors have meant that levels have been unusually low this year.
Europe emerged from the previous winter with particularly depleted inventories, while the surge in gas prices linked to the Middle East war has raised the cost of refilling facilities.
Berlin plans to establish a strategic gas reserve, beginning in 2027, to mitigate the risks from future energy shocks.
The German announcement came a day after the European Union proposed delaying new rules to cut planet-warming emissions from methane to “relax” pressures on energy markets.
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