• Natural Gas News

    BREAKING: EU members strike deal on 15% gas use cut

Summary

The agreement includes some concessions to member states that had spoken out against the proposal.

by: NGW

Posted in:

Complimentary, Natural Gas & LNG News, Europe, Top Stories, Political, Market News, News By Country, EU

BREAKING: EU members strike deal on 15% gas use cut

EU member states have reached a political agreement on voluntarily reducing gas consumption by 15% starting this August, the EU announced in a statement on July 26.

As proposed by the European Commission last week, the gas cut will remain in force until the end of March, using average consumption over the last five years as a baseline. The measure is aimed at preserving gas reserves in the event that Russia cuts off supply entirely in an effort to destabilise Europe.

Advertisement:

The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business.

ngc.co.tt

S&P 2023

The agreement was reached during an emergency meeting of EU energy ministers in Brussels. There had been concern that the commission would struggle to secure support for the proposal, as a number of member states mostly in south Europe have voiced their opposition in recent days. As such, the agreement makes certain concessions to those states.

Among those critical of the measure were Cyprus, Portugal and Spain, who argued that their limited connection with the main European gas system meant that any cuts in consumption they made would have little benefit to other member states. As such, the agreement states that those member states without connection to others' networks are exempt from mandatory gas reductions.

Member states can also request a waiver if they have overshot their gas storage filling stations, if they are heavily dependent on gas as a feedstock for critical industries, or if their gas consumption has increased by at least 8% in the past year versus the five-year average.

The European Commission had proposed giving itself emergency powers in the event of an acute shortage of gas, enabling it to impose mandatory cuts on member states. Under the agreement, though, this decision will rest with member states, acting on only a proposal from the commission.

"Today’s decision has clearly shown the member states will stand tall against any Russian attempt to divide the EU by using energy supplies as a weapon," Czech industry minister Jozef Sikela said in a statement. "Adopting the gas reduction proposal in record time has undoubtedly strengthened our common energy security. Saving gas now will improve preparedness. The winter will be much cheaper and easier for EU’s citizens and industry."

The agreement comes a day after Gazprom warned it would be further cutting gas flow via the Nord Stream pipeline to only just above 20% of capacity beginning the morning on July 27, citing the need to shut down a Siemens turbine because of its technical conditions. However, Germany and others have said the move is "not technical in nature," inferring political motives.