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“Energy battle” between Europe and

Russia not over yet: IEA head

EUROPE THE head of the International Energy Agency the director told the Financial Times. “I think
(IEA) has warned that the “energy battle” is still Europe did a good job, [its strategy has] been
There is still a risk of not finished between Europe and Russia, despite a big success. But being overconfident for next
shortages next winter. the recent sharp decline in gas prices. winter is risky and it is time to continue and step
The front-month contract at Europe’s pre- up efforts for 2023.”
mier TTF gas hub dipped below €50 per MWh Europe’s gas storage facilities are currently
($567 per 1,000 cubic metres) on February 21 around 63-64% full, which is far above the 45%
for the first time this year, amid easing fears of average over the last five years for this part of
shortages, warm weather, ample LNG and lower winter.
industrial demand. It marks an 18-month low However, this time last year Russian gas sup-
for a front-month contract. ply was flowing to Europe at the normal rate.
Gas prices nevertheless remain significantly Now the country’s pipeline gas deliveries are at
higher than in previous years, meaning that the only 15-20% of the pre-war level. Stocking up
energy crisis is far from over. Expectations are on gas this year will therefore be a harder task,
that the market will remain tight for several more depending greatly on how much LNG Europe
years, before a wave of new LNG supply comes can source.
on stream in the middle of the decade. Birol also noted that the reopening of the
IEA Director Fatih Birol hailed Europe’s pro- Chinese economy after stringent COVID-19
gress in replacing Russian gas supplies this win- lockdowns could also cause a spike in competi-
ter. Russia has drastically cut gas supply over the tion for LNG supplies between Asia and Europe.
past year, but the EU has managed to withstand “Some of the achievements made on clean
this shock by rapidly increasing LNG supply and energy and reducing Russia’s revenues are good,
import capacity, as well as introducing require- but it is not a permanent solution,” the director
ments for member states to bolster storage vol- said. “We have had the help of mild weather. We
umes. Unseasonably warm weather has also gained some time, which is vital, but there is
been a critical factor. much more to do.”
Despite Europe’s “big success,” Birol warned The Freeport LNG terminal in Texas, one
of the risk of supply shortages next winter, of the biggest sources of European LNG sup-
however. ply prior to its closure after an explosion eight
“Russia played the energy card and it did months ago, began the process of restarting last
not win … but it would be too strong to say week. This should put further downward pres-
that Europe has won the energy battle already,” sure on global LNG prices. ™

Week 09 03•March•2023 www. NEWSBASE .com P19