Germany is grappling with gas storage capabilities and plans for regional energy security
A watchdog in Lower Saxony in Germany said that the German natural gas storage facility in Reiden, Lower Saxony, the largest in Germany, cannot store any gas.
The storage facility represents a fifth of the total storage capacity available in Germany and is also one of the largest in Western Europe, with an operating capacity of about 4 billion cubic meters on an underground area of about eight square kilometers, according to the facility’s website.
The natural gas storage facility burned down for unknown reasons.
Data from the German Federal Grid Agency showed capacity was 90.29% full on Tuesday afternoon.
“Investigations are ongoing into the cause of the arson,” a spokesperson said on Wednesday.
Storage has been stopped as a precaution, and the storage facility cannot be refilled for days with no specific date set for when storage will resume.
The State Bureau of Mining, Energy and Geology said there was no evidence of an outside influence.
An official spokesperson told the media that the combustion occurred during the storage phase, not the delivery phase, adding that no one would run out of gas.
Just two weeks ago, German gas storage operators said they didn’t expect any gas supply problems next winter based on lower consumption this winter, and said there was no chance of a shortage this winter, even with extremely low temperatures and even calculations for risk factors.
Storage facilities in Germany are nearly 90% full, well above their statutory requirement for a 40% capacity, achieved in part by reduced utilization due to mild winter weather and deliberate usage restrictions.
The Russian Gazprom company had abandoned the gas storage facility in Redin last April with strained relations with Europe.
Germany started filling the storage facility a month later, in May.
After banning fracking in 2017, Germany is now reconsidering its position with Finance Minister Christian Lindner saying that the higher LNG prices it is paying should force Berlin to allow private investors to decide whether extraction is economical.
Germany received its first shipment of US LNG, which German officials described as a boon for regional energy security.
The shipment came just weeks after the opening of the first LNG regasification facility in Wilhelmshaven, Germany, which received an LNG supply ship that set sail from Louisiana on December 19 carrying enough gas to meet the requirements of the average 50,000 German households for an entire year.
Nick den Hollander, chief commercial officer of German energy company Uniper, said: “The use of LNG as a reliable source of energy is critical to security of supply for Germany and Europe and we are committed to contributing our part by bringing more LNG to the European market, especially Germany”.
“As strategic partners, we look forward to providing long-term security of energy supplies to our allies through the continued delivery of clean and reliable US LNG,” said Mike Sabel, CEO of Venture Global.
At the time, Russian gas exports to Europe via pipelines fell to their lowest levels in 2022 since the collapse of the Soviet Union, as its largest customers cut imports due to the conflict in Ukraine and a major pipeline was damaged by mysterious explosions.
The European Union, Russia’s biggest oil and gas consumer, has talked for years of reducing its dependence on Russian energy, but Brussels got serious after the Kremlin sent troops into Ukraine in February.
The Russian State-owned Gazprom said its exports outside the former Soviet Union would reach 100.9 billion cubic meters this year.
This is down more than 45% from 185.1 billion cubic meters in 2021 and includes supplies to China via the Power of Siberia pipeline, through which Gazprom supplied 10.39 billion cubic meters last year.
According to Gazprom’s exports, one of the previous declines in the company’s post-Soviet gas sales to the far abroad was at 117.4 billion cubic meters in 1995.
Meanwhile, Russia increased its seaborne LNG sales, thanks to Mostly to the Yamal LNG plant operated by Novatek in the Arctic.
Russia’s LNG production rose by almost 10% in January-November to 29.7 million tons.
Russian Tass news agency quoted Russian Deputy Prime Minister Alexander Novak as saying that Russia will reduce natural gas production and exports in 2023 due to the closure of export infrastructure.
Novak said in an interview with TASS: “Gas production by the end of the year will be 12% less than in 2021, and exports will decrease by about a quarter… This is primarily due to the closure of the export infrastructure”.
Novak added that LNG production will rise by 8.7% this year.
According to Novak, Moscow has managed to prevent a drop in oil production despite Western sanctions.
“According to preliminary data from the Energy Ministry, this year we will increase oil production by about 2% compared to 2021 to 535 million tons, despite pressure on the industry, and exports will increase by 7.5% to 242 million tons,” Novak said in a statement.