European natural gas prices are nearly 10 times what they are in the US due to declining storage levels, surging demand and lower deliveries from Russia, one of the EU’s major suppliers.
Gas storage held by Russian energy company Gazprom in the EU is already low and gas exports to the bloc between October and November were about 25% lower than during the same period last year.
The European Commission is proposing a voluntary mechanism for natural gas purchases to go to a strategic reserve.
The commission could move to update EU gas market rules as early as this week to accommodate the proposal.
Reuters quoted a commission document as stating:
- The proposals will include an enabling framework for the joint procurement of gas strategic stocks by regulated entities on a voluntary basis
Storage could also serve as a gauge of a member state’s exposure to supply-side risks.
The document added:
- Member states, through joint cooperation at regional level, should be able to rely on storage in other countries in case of needs