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The leaders of the European Union member states are expected to discuss this week a new system to jointly buy natural gas in order to create strategic reserves to protect the countries and consumers from gas shortages and soaring energy prices.
The European Commission, the EU’s executive branch, has drawn up proposals for the creation of the new system and has circulated the document among EU member states ahead of a leaders’ summit on Thursday, Reuters reported on Monday, quoting the document it had seen.
“The proposals will include an enabling framework for the joint procurement of gas strategic stocks by regulated entities on a voluntary basis,” the European Commission’s document reads.
“Member States, through joint cooperation at regional level, should be able to rely on storage in other countries in case of needs,” according to the proposal.
The EU has been looking for months to put additional regulations in place, seeking to avoid in the future a repeat of the current gas and energy crisis in Europe, where decade-low levels of gas in storage have led to skyrocketing gas and electricity prices in recent months.
After gas prices in Europe hit a record high in early October, the European Commission unveiled a toolbox to tackle the energy crisis, including immediate emergency measures to provide temporary, targeted reductions in taxation rates for vulnerable households, and provide aid to companies or industries, in line with EU state aid rules.
Even after the market stabilizes next spring, prices would stay “higher than the average of the past years,” the Commission said in October.
Part of the toolbox includes investigating “possible anti-competitive behaviour in the energy market.”
According to the Commission’s document for this week’s summit seen by Reuters, the EU’s natural gas imports from Russia were 25 percent lower in October and November compared to the same months in 2020. Storage sites in the EU owned by Russia’s giant Gazprom are also “significantly lower,” according to the document.
Russia has said that it fulfills all contractual obligations for gas supply to its customers in Europe, but European gas prices continue to be very sensitive to the daily Russian flows to Europe and to signs whether Gazprom is booking additional capacity on pipelines above its contract commitments.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.