Portugal will start the winter in a good energy position. The country is on the podium of countries with the largest natural gas reserves in Europe (in percentage terms).
It is in second place with 96% of its reserves filled, totaling 3.45 TWh, thus exceeding the July target of 80% and already above the 80% required on September 1, according to data from the European regulator.
Spain holds the top spot with 100% reserve (36 TWh), with Sweden (0.1 TWh) closing out the podium, followed by Poland (95% and 35 TWh).
In absolute percentage terms, Germany leads with 232 TWh of stored natural gas (93%), followed by Italy with 182 TWh (91%) and the Netherlands with 125 TWh (87%). In the EU, total reserves now stand at 90%, totalling 1,000 TWh.
Of the countries analyzed, Ukraine is in the worst position (22% or 70 TWh), followed by the United Kingdom (63%) and Latvia (69%). In absolute terms, Sweden, Portugal and Croatia are the countries with the lowest natural gas reserves, all below 4 TWh.
Analyzing the current level of gas reserves, Nuno Ribeiro da Silva believes that Portugal has done its “little ant” work during the summer to prepare for the winter. “It is wise. We have already learned that the most unexpected things can happen. We do not have very large spare capacity, so it is important to create reserves.”
Asked if Portugal needed to increase its capacity, the energy expert said it would be “desirable” but a “paradoxical” scenario.
“On the one hand, we have all the political pressure to end fossil fuels, including natural gas, even though it is less aggressive compared to oil and coal, but it is still a bit contradictory that we are making large investments in gas infrastructure, in storage, when we say we want to end gas. It creates insecurity and discomfort in terms of mobilizing large amounts of money to invest in something that has been announced and we want to walk away from it. It is a bit difficult to go through an investment decision that will have a regulated cost, a gas tariff, gas will be more expensive, very long consumption periods, and then say that, in the long run, we do not want natural gas,” he said.
“It is not very convenient to mobilize all this money and reflect it on the gas tariff when the perspective is to try to gradually abandon the use of natural gas, but it is also an evolving process. There has been an increase in electricity generation based on renewable energy sources. Less gas is used, there are fewer cubic meters to mitigate fixed costs, the fixed component of the tariff is overcharged, and now we will mobilize 100 million or 150 million to enhance the storage capacity of natural gas… It is a difficult decision. I take into account the short-term consequences in the cost of the tariff,” he said.
This year, the president of the National Energy Sector Authority (ENSE) defended the creation of a strategic natural gas reserve in Portugal. “There will always be investments in the range of 100-200 million euros if we want to have a long variation period,” between “six to eight weeks” equivalent to natural gas consumption, “to add between three and four weeks to what we have,” Alexandre Fernandes told JE in April.
Goldman Sachs predicted in a note issued on Tuesday that the cold winter in Europe threatens to trigger a significant spike in natural gas prices.
Analysts at Bank of North America estimate that European gas storage will reach a “comfortable” 95% in October, forecasting prices of €43/MWh in the base case, in a market that remains “tight.”
However, in the event of a deviation due to lower than normal temperatures, prices should rise to 60/80 euros/MWh.
Analysing the increase recorded in recent weeks, which reached EUR 40/MWh this month, the bank concluded that this is due to “fear” that Russian gas, which continues to pass through Ukraine (9% of the total gas supplied in northwestern Europe) “will stop due to instability in the region”.
Analysts believe that the rise in gas prices is exaggerated: first, because the gas still passes through Ukraine and the current agreement expires only in January 2025; second, there are other alternatives to this gas, such as buying it from Algeria via Italy, or from Turkey via Hungary.
In contrast, consultancy Rystad Energy believes the market is already ignoring geopolitical risks, including the Russian invasion of Ukraine and the recent Ukrainian offensive in Russia, which resulted in Ukrainian forces seizing the Russian Sudzha gas station.
“Russia’s efforts to build a stealth fleet and circumvent sanctions add to the complexity, with European gas markets closely watching for potential disruption. Gas demand is expected to remain high in many regions in the short term.” Expectations “The temperature is above average,” analyst Christoph Halser said in a report published on August 8.
Rystad also warns of the dangers of tension in the Middle East and a possible attack by Iran on Israel, following the assassination of Hamas leader Ismail Haniyeh in Tehran.
About one-fifth of the world's daily oil consumption (20 million barrels per day) and 20% of the world's natural gas consumption pass through this strait in the Middle East.
In its Gas Infrastructure Utilization Bulletin, released by the Energy Services Regulatory Authority (ERSE) on Tuesday, relating to the second quarter, the regulator highlighted that as of June 31, cavern gas storage reached 102% of the company's commercial capacity available supply, which is “equivalent to three days of average national consumption”.
“The REPowerEU plan sets the target that each country should have at least 90% of its gas reserves in underground facilities by November 1, 2023 and in the following years,” according to the entity led by Pedro Verdelho.
ERSE also reveals in its analysis that the LNG that entered Portugal in the first half of the year originated in Nigeria (49%, 11 ships), the USA (46%, 13 ships) and Russia (5%, 1 ship). Remember that Russian LNG is not subject to sanctions.
In terms of exports, via the connection with Spain, through the two gas pipelines, the export balance was positive, totaling 3,144 GWh, up 19% compared to the same period last year, with imports down 41% and exports down 5%.
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