German Economy Ministry Sees No Imminent Gas Supply Crisis

Germany's Federal Ministry for Economic Affairs is working to alleviate concerns about potential gas supply shortages during the upcoming cold season, stating that a gas deficit is not anticipated based on current information. However, the ministry has not ruled out future government intervention.

The ministry acknowledged the lower-than-usual gas storage levels this year but stressed that supply security is not solely determined by storage capacity. It highlighted that gas imports arrive via pipelines from Norway, through liquefied natural gas (LNG) terminals, and from neighboring European countries. The ministry cautioned that lower storage levels do reduce the buffer for extraordinary situations, particularly if multiple pressures occur simultaneously, such as prolonged cold spells combined with the failure of critical import infrastructure or disruptions in the international LNG market.

According to the ministry's assessment, storage levels of 60 to 70 percent at the start of winter, coupled with import capabilities, should be sufficient to meet average winter demand. Currently, German gas storage facilities are approximately 50 percent full. High gas prices this summer, influenced by the conflict in Iran and the blockade of the Strait of Hormuz, have led traders to purchase less gas for winter sales. The ministry clarified that a tight market with high prices does not automatically constitute a supply crisis.

The ministry emphasized that winter preparedness is primarily the responsibility of gas companies and traders, as state intervention could create additional demand, drive up prices, and displace private storage. Nevertheless, the federal government is preparing necessary options for swift and targeted deployment should the situation worsen. This involves monitoring storage levels, imports, LNG availability, infrastructure, demand, and the situation in neighboring European countries. The German Association of Energy and Water Industries (BDEW) also expressed confidence that gas suppliers are fulfilling their contractual obligations, assuring customers of reliable supply.