German gas tank filler THE targets buffer to avoid squeeze next winter

European Energy Exchange AG

31/01/2023 10:00

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      THE has so far bought 50 TWh, spent 9.3 bln euros
    

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      THE MD says won't empty stocks completely by April 
    

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      Dismisses talk of overspending
    

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      Says THE guided by state orders to ensure supply security
    

  
       FRANKFURT, Jan 31 (Reuters) - 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 behaviour.
"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    Frank said that gas would continue to be withdrawn from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 metres
(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.
    EMERGENCY MEASURES
    THE - whose owners include gas grids Gascade, Open Grid
Europe and Gasunie  GSUNI.UL  - 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  DB1Gn.DE  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 TRNLTTFMc1  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)
 ((vera.eckert@thomsonreuters.com; +49 30 2201 33654;
@EckertVera;))