Press Release PR-14-09

Regulators reports to Madrid Forum on strong storage situation and role of LNG in security of supply

Brussels, 15 October 2014

• No “one size fits all” for strategic storage
• Regulators can help in stress test assessments
• Europe has under-used LNG regasification capacity

Today at the Europe Gas Regulatory Forum “Madrid Forum1” (15-16 October), CEER2 presented the gas storage situation and the important role that LNG plays in Europe’s security of supply.

Stressing the important role of storage for security of supply for the Winter ahead, CEER Vice President, Walter Boltz, reassured Forum participants that Europe has in 2014 its highest stock levels ever recorded. Strategic storages are implemented in some Member States, others have imposed supplier obligations to storage, but in many Member States storage obligations are not deemed necessary, because storage capacity is practically fully used by the market participants even without any obligation imposed on the market.

No “one-size fits all” for strategic storage
On the issue of whether intervention is needed to ensure sufficient storage levels, Mr Boltz stressed the need to take Member State’s differences into account:
Any mechanisms to safeguard security of supply using storage should only be adopted in case of market failure and on a case-by-case basis, and it has to be carefully analysed if strategic storage is effective and efficient to really improve the security of supply. Furthermore not all countries are in a position to construct gas storage and the distribution of the stored volumes is also dependent on available transport capacity. The continued development of the Internal Energy Market, with sufficient cross-border flows remains crucial to enhancing EU energy security. A crucial prerequisite to the efficient use of storage in Europe is the fully open access of storage capacity to all users across the EU irrespective of national borders.”

Regulators can contribute to “stress test” assessments
Regarding country “stress tests”, an assessment of which was reported by the Commission to the Madrid Forum, Mr Boltz highlighted the valuable contribution that regulators can make in evaluating the security of supply situation in Member States and called for the Commission and Member States to involve regulators in such stress test exercises in all countries, in particular in the development of any additional measures that could affect markets. On the European Commission’s Energy Security of Supply Strategy3, CEER has recently published its views4.

Europe has under-used LNG regasification capacity
Mr Boltz explained that LNG is now returning to Europe (after previously leaving Europe following higher prices in Asia and South America), that Europe has significant under-utilised regasification capacity, and that an increasing number of LNG terminals are serving as storage/reload facilities: 

“LNG terminals in Europe are adapting their facilities to changes in a global LNG market and the low rates of regasification capacity utilization. LNG storage and reloading are growing in importance and Europe is well-placed to buy spot cargoes if needed. LNG is playing a key role as a security of supply tool through diversification of sources, routes and competition.”

CEER will soon publish a report on monitoring access to LNG terminals5, and intends to publicly consult on its vision of the regulatory arrangements for the gas storage market.

Ends (see Notes for Editors)


Notes for Editors:  

  1. The Council of European Energy Regulatory (CEER) is the voice of Europe’s national energy regulators. Its members and observers, from 33 European countries, are the independent statutory bodies responsible for energy regulation at national level. Visit and the dedicated customer section of the CEER website.

  2. The European Gas Regulatory Forum (Madrid Forum), a bi-annual meeting organised by the European Commission, discusses issues regarding the creation of a true internal gas market. The participants include national regulatory authorities, Member State governments, the European Commission, transmission system operators, gas suppliers and traders, consumers, network users, and gas exchanges. The 26th Madrid Forum took place from 15-16 October 2014. See the regulators’ presentations at the 26th Madrid Forum.

  3. In response to the political crisis in Ukraine and in view of the overall importance of security of supply of energy for the EU's citizens and economy, the European Commission adopted an EU Energy Security Strategy (EESS) on 28 May 2014 (including an in-depth study of Member States' energy dependence). The European Council discussed the EESS during its meeting on 26-27 June 2014 and endorsed the immediate implementation of a set of most urgent measures to strengthen Europe's resilience and increase its energy security in the short term, before the winter of 2014/2015. At the request of Energy Commissioner Oettinger, Member States submitted by the end of August their "country reports", assessing the risk of a short term supply disruption ("stress tests"). The Commission presented their assessment of the stress tests to the Madrid Forum. The Commission’s conclusions and recommendations are expected in time for the October European Council meeting.

  4. CEER’s position paper on the European Commission's Communication: European Energy Security Strategy highlights 2 guiding principles for any actions being considered:
    - Ensure market functioning and market-based measures as long as possible
    - Take Member States’ differences into account and avoid “one size fits all” solutions.

    CEER has also explained its views on a number of the issues raised in the European Commission's Communication: European Energy Security Strategy:
     - National Regulatory Authorities (NRAs) can contribute to evaluating the security of supply situation and should be involved in such exercises
    - The Security of Supply Regulation (994/2010/EU) should be fully and proper implemented before revising the Regulation
    - The streamlining measures and financing opportunities in the TEN-E Regulation 347/2013/EU should be optimised for high priority Projects of Common Interest (PCIs)
    - The electricity interconnector capacity should be increased, however a single target should be avoided   Access to gas storage must be open to all users across the EU. Any mechanisms to safeguard security of supply using storage should only be adopted in case of market failure and on a case-by-case basis 
    - LNG has an important role to place as a possible source for short term additional supplies. CEER continues its work on this.
    - The Third Package and regional cooperation are essential to strengthen our energy security. Possible measures "to increase the bargaining power of European buyers” should be done in compliance with the EU acquis and trade law.

  5. CEER has dedicated significant resources in recent years to understand and improve how Europe’s LNG terminals operate, with the aim of promoting competition and security of supply. In 2012, GLE-CEER launched the LNG Transparency Template, with the objective of facilitating access to LNG terminals by providing users with the information they need in an accessible way, also allowing LNG operators to comply with transparency provisions in European regulation. The soon-to-published CEER LNG report (2009-2013) shows an increase in regasification and storage capacity (thanks to new terminals), the new role of LNG in terms of security of supply, new services offered and new LNG uses.

    Council of European Energy Regulators (CEER)
    Cours Saint-Michel 30a, box F
    1040 Brussels

    Ms Una Shortall
    Tel. +32 (0) 484 668 599