Supply offer three times larger than EU demand for natural gas under joint scheme

natural gas

 

Global suppliers of natural gas have shown significant interest in the EU’s aggregated demand for natural gas, with suppliers’ offers outstripping the bloc’s demand by three times – a heartening result for the bundling scheme proposed following the energy crisis.

One of the EU’s responses to the energy crisis of 2022 was a platform to bundle EU natural gas demand – the more buyers bundle their demand, the better their negotiation position, in theory. The scheme, known as AggregateEU, has since been made permanent.

On 22 February, 19 companies registered demand for 34 billion cubic metres (bcm) of gas. By Wednesday (28 February), suppliers had offered a whopping 97.4 bcm to the platform – double the maximum annual throughput of the defunct Nord Stream 1 pipeline.

Companies who demand gas, and those who made offers, will now enter into bilateral negotiations, although given the surge in supply, things look promising for European companies.

“The bids surpass the collective demand – in fact they are almost three times the level,” cheered Maroš Šefčovič, European Commission Vice-President who championed the scheme, on Wednesday.

Of the bids on the demand side, 15 bcm are for liquefied natural gas (LNG) while another 18.3 bcm are for delivery via pipeline. Once struck, the contracts will run until late 2029, at which time they will need to be renegotiated.

The AggregateEU scheme will continue to operate past the energy crisis on a voluntary basis – independent of this, a small share of gas stored in Europe has to be purchased via the mechanism.

Gas undertakings in the EU and those “established in Energy Community countries [located in the Western Balkans] may participate in the mechanism as purchasers, while supplies from Russia or Belarus are excluded,” EU countries said in December 2023.

Source: Euractiv.com

1031 Exchange E-Book

ENB Top News 
ENB
Energy Dashboard
ENB Podcast
ENB Substack

About Stu Turley 4195 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.