The European Union (EU) is on track to start joint natural gas purchases before the summer, with most member states and some nonmember states indicating the assistance they will need to refill storage inventories ahead of next winter, said European Commission (EC) Vice President Maroš Šefčovič.
Šefčovič in a press briefing on Thursday said after the second meeting of officials leading the EU Energy Platform, 22 member states had expressed interest in aggregating demand for about 600 Bcf of supplies over the next three years. Non-EU members Moldova, Serbia and Ukraine also signaled demand for 141 Bcf.
While that represents only a fraction of the 14.5 Tcf consumed by the EU in 2021, Šefčovič stressed that the bloc must “make full use” of joint purchases to better protect against gas shortages and high prices in a tight market.
The energy platform was formed early last year to diversify supplies as Russia gradually cut off deliveries after invading Ukraine. EU members are required to work with local companies to aggregate demand for volumes of gas equivalent to 15% of their respective storage obligations.
Šefčovič said in January after the platform’s first meeting that the bloc was aiming to start joint gas purchases “well before summer.” The effort has been met with reluctance by market players who have expressed doubts about the bloc’s ability to attract lower prices with collective bargaining power.
“We have also advanced in our discussions to identify the most efficient structure for organizing those companies who will pool their demand together,” Šefčovič said Thursday. “For this, we foresee, for instance, a so-called central buyer scheme, under which one gas company will negotiate, on behalf of smaller gas companies and gas consumers, a contract with suppliers for the aggregated demand.”
In January, the EC contracted Prisma, a natural gas capacity trading platform, to pair the EU’s import needs with suppliers. Šefčovič said the platform would soon call for expressions of interest to act as a central buyer.
“We aim to have a number of central buyers, representing different groups of companies, to encourage competition, to the ultimate benefit of European consumers,” he said.
Europe has leaned heavily on LNG deliveries to fill the void left by Russia. Imports have hit record highs over the past year as the continent tapped into the spot market. However, longer-term gas supply deals have been slow to materialize on the continent.
Šefčovič noted that the platform has been meeting with member states, EU gas producers, gas consumers and international suppliers. It has also encouraged the five remaining member states that have not indicated their demand needs to do so as soon as possible.
“Next week, I will host a meeting with associations representing major industrial consumers in Europe, and a virtual meeting with reliable international gas suppliers,” Šefčovič told the press. “And I hope to build on the positive engagement I encountered in the United States where we saw that the platform offers an attractive opportunity for U.S. liquefied natural gas suppliers.”