Latest News

Uniper, a German gas company, says that it has filled up 70% of the contracted storage space.

Uniper, a German company, has filled 70% its?natural-gas storage capacity reserved over the summer despite the wholesale prices being low. The war in Iran is making the market more challenging.

Michael Lewis said that an?inverted winter-summer spread', where the summer wholesale prices are higher than those of the winter, means there is no incentive to store gas. He made this statement after signing a deal for gas supplies with Norway's Equinor.

"Now, that doesn't imply we haven't stocked any gas." Lewis stated that we've filled about 70% of the contracted gas storage.

He added that the price spread had moved in the correct direction over the past few weeks.

The CEO stated, "We're at the market every single day, buying gas and storing it in places where we feel there's an incentive to do this. We will continue to do that."

According to the transparency platform AGSI, as of Thursday, German storage levels are just above 50%, compared with 76% one year ago, and 62% in European Union nations.

The summer is the time when energy companies and traders store gas, as prices are usually lower. However, the Iran War has pushed up the prices, which makes storing gas less profitable than selling it.

Uniper signed on Monday a deal with a supplier,?Equinor, for a pipeline natural gas imports from Norway starting January 1, 2027. However, this will not assist with gas storage during the winter of 2018, Lewis said.

The European Union can also rely on LNG to supplement its pipeline gas supply. However, the closing of the Strait of Hormuz - through which 20% of global LNG supplies used to pass - has pushed up prices around the world.

"Sure, that's a big challenge." Lewis stated that we need to find a diplomatic solution and will do all we can from our end to ensure gas is available for our customers. (Reporting and editing by Terje Solsvik, Nora Buli)

(source: Reuters)