With an official natural gas storage plan by the European Union (EU) in hand, member countries are bearing down on filling reserves while the market keeps a wary eye on volumes from Russia and U.S. liquefied natural gas (LNG) producers.

The European Commission (EC) solidified on Monday a plan that directs storage facilities in member states to reach 80% of capacity by November. Following that target, EU storage is expected to reach 85% by the end of the year and then 90% for the following winter.

Kadri Simson, European Commissioner for Energy, said the rule should send “a very clear message” to European and international energy companies on the need to act for the bloc’s security. However, she also acknowledged the hard road ahead for member states already impacted by gas curtailments and price shock.

“Still, some member states have progressed less well and it is important that all countries continue filling the storage, despite the reduction of gas flows,” Simson said. “It is likely that things will become more challenging in the coming months.”

Analysts with European energy trading firm Energi Danmark wrote that prices could remain volatile in the weeks ahead, but gas markets seemed to be relatively quiet on Tuesday. Reduced flows from Russia and the possibility of a cutoff of Nord Stream 1 after its 10-day closure for maintenance in July were still stoking concern, according to the firm.

“This pushed contracts higher across the curve, although there are still hopes that the European gas inventories could be close to full ahead of winter, if the U.S. manages to ramp up LNG exports again,” Energi Danmark analysts wrote.

The Dutch Title Transfer Facility benchmark for gas delivered in August closed Monday at $40.536/MMBtu. It was slightly lower than last week’s high of $41.378/MMBtu on Thursday. TTF finished just under $40 on Tuesday.

While the EU’s storage targets are now set, NGI’s Pat Rau, director of strategy and research, said there are few signs on the horizon that U.S. producers will be able to increase output to Europe any further than current levels. Instead, Rau said, U.S. volumes are still expected to be hindered due to the shutdown of Freeport LNG in Texas following a fire.

“Freeport shipped 75% of its cargoes to Europe through the first four months of 2022, and obviously those will be gone for a while,” Rau said. “The other U.S. LNG facilities have been shipping the same rough percentage of their cargoes to Europe, so there is only so much more those can send to that region.”

Venture Global’s Calcasieu Pass LNG terminal in Louisiana has slowly been ramping up production as its modular liquefaction units come online. However, Rau said it was unlikely to see a significant portion of that capacity become available for Europe before the winter.

Europe is also still in competition with regions like Asia and Latin America for U.S. cargoes, with volumes already locked into long-term contracts. Rau said whether EU members meet their winter goals given the tight market will ultimately be determined by price.

“If they are willing to pay, I imagine cargoes will continue to find their way to Europe,” Rau said.

High prices for gas to Asia have already created some demand destruction this year as large buyers like China have eschewed their usual volumes of LNG in favor of coal or domestic supplies. 

The Japan-Korea Marker for gas delivered in August has held around $37/MMBtu since last week. JKM finished Monday at $37.090/MMBtu. JKM prices could again rise as news media reports surfaced of  a labor dispute delaying cargoes from Shell plc’s Prelude floating LNG facility offshore Australia.

While trying to replace Russian gas, European countries have also been increasingly activating gas consumption warnings and contingency plans. Denmark on Tuesday became the latest to encourage residents to conserve energy as it adapts to a loss of volumes from the east.


UK consultancy Timera Energy calculated European gas demand could be 9% lower than the 532 billion cubic meters it used last year. Around 29% of those volumes came from Russia. While Timera wrote Europe will both have to curtail demand and quickly diversify its supply of gas, plans to tap LNG projects likely won’t help the continent meet its storage goals.

“There is a 4-5 year lead time to bring on new LNG supply,” Timera analysts wrote. “That means new investment in LNG supply that has been triggered by Europe’s pivot from Russian gas to LNG will have no impact until 2026 at the earliest.”

The EU strategy of “diversification” of its gas imports has largely focused on U.S. cooperation on LNG, but it is also solidifying new partnerships with countries like Israel, Egypt and Qatar.


The Commission also unveiled a new agreement this week with Norway, which made up about 23% of Europe’s total volumes by pipeline last year. The EU and Norway will explore further project opportunities for “additional short-term and long-term gas supplies,” according to the agreement.