Germany orders SEFE to increase gas reserves ahead of winter — The Local Germany

On September 30, the German government instructed the state-owned company SEFE to increase natural gas reserves due to the low level of storage facilities ahead of winter. As The Local Germany reports, the decision was made by Economy and Energy Minister Katherina Reiche, citing persistent geopolitical risks.

Reserves below the EU average

Germany’s gas storage facilities are currently filled to about 58%, while the average level in the European Union is around 70%. This is also significantly below the reserve levels established in the country as necessary for the winter period.

SEFE will independently determine at what stage and by how much to increase gas volumes in storage facilities. The Economy Ministry expects this step to signal other companies to also build up reserves.

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Impact of the situation in the Middle East

Germany’s main gas storage facilities must be filled to 80% before winter. However, reserve levels remain unusually low this year: Europe ended the previous winter season with significantly depleted stocks, while higher gas prices have complicated their replenishment.

At the beginning of September, gas prices in Europe rose to a three-year high. Global energy markets were affected by the conflict in the Middle East and the near-total closure of the Strait of Hormuz. Europe significantly diversified its supplies after Russian gas deliveries were reduced as a result of Russia’s full-scale invasion of Ukraine in 2022, but supply disruptions from the Persian Gulf region have created new risks for the market.

SEFE, which was previously the German unit of Russia’s Gazprom, became state-owned by Germany after the start of Russia’s war against Ukraine. The company operates about a quarter of Germany’s gas storage capacity. Berlin also plans to create a strategic gas reserve from 2027 to reduce the risks of future energy shocks.