Europe Faces Risk of Gas Price Spike: Wintershall
Natural gas prices could soar in Europe if Russia and Ukraine are unable to agree on a new contract for gas transit next year, Mario Mehren, head of Germany’s Wintershall DEA, told reporters at the St Petersburg International Gas Forum on October 3.
“I’m not worried that Europe will have to deal with a physical shortage of gas: underground storage facilities are full, we have alternative gas supplies, there is gas coming from Norway, we have our own production and finally there is an opportunity to get LNG,” Mehren said. “My fears are that if an agreement is not signed … prices may rise sharply, and this may have a long-term negative impact on the gas market.”
The current contract on Russian gas transit via Ukraine is due to expire at the end of this year and Moscow and Kiev are yet to make visible progress in talks on a new deal.
“As gas suppliers we want to have a stable gas market so that consumers can make investment decisions,” Mehren told reporters. “I really hope that negotiations between Russia and Ukraine will be successful, that the European Commission will be able to play its role and be a good moderator.”
Mehren described a recent ruling by EU Court of Justice restricting Gazprom’s access to Germany’s Opal pipeline – which receives gas from the Nord Stream system – as “confusing.”
That was milder language than Wolfgang Peters, formerly at RWE's gas supply business and now running his own consultancy Gas Value Chain. He told NGW it was "preposterous."