Europe's Gas Storage Set to Expand

BERLIN, Jan. 18 (UPI) — Europe’s gas storage capacity is set to increase dramatically over the next decade.

Gas storage capacity in Western Europe is expected to be nearly doubled by 2025, according to auditor PricewaterhouseCoopers.

The boom in storage is fueled mainly by supply security concerns, rising imports from the Middle East and an increasing popularity of gas-fired power stations, Reinhard Ruemler, Robert Senger and Stefan Tenner from PWC’s energy team write in the magazine European Energy Review. Moreover, the liberalization of the European gas market and a functioning regulatory regime made it easier for players to invest in new storage, they write.

Western Europe’s gas storage capacity will be nearly doubled from the current 66 billion cubic meters to 125 bcm until 2025.

Germany, which already is the largest storage market in Europe, is due to see yearly investments of around $430 million in the coming years and increase its capacity from 20 bcm to 28 bcm. Italy will boost its storage capacity by 79 percent to 25 bcm, with Britain even planning to triple its capacity by 2020 to 13.5 bcm. Austria, Spain and the Netherlands are all planning to roughly double their storage capacity.

Only France is lagging a bit behind, the experts say.

“In the French market storage capacity is allocated by the storage systems operator only to companies that have access to end customers,” Ruemler, Senger and Tenner write. “While this regime meets mandatory public obligations such as security of supply, it limits third party access to storage and hence the development of a liquid and liberalized market.”

But elsewhere, the market is healthy, despite the hit it took from the financial crisis.

In Germany, “storage capacities have proven to be attractive to a wide customer base ranging from international gas suppliers to supra-regional, municipal utilities and energy traders,” the experts write.

Some experts have called for an increased regulation of the gas storage market, but PWC argues this would scare off investors.

“The EU and member state governments should resist the temptation of introducing additional legislation that would increase uncertainty for operators and investors: the market is working,” they write.

Copyright 2010 by United Press International

Categorized | Oil & Petroleum
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