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Update: Urgency Grows to Fill German Gas Storage Faster, Industry Group Says

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(Updates with Uniper comment in tenth and 11th paragraphs.)

Germany's gas storage operators expect some leg room to build reserves of the fuel before winter, but any additions need to happen at a faster pace, their umbrella association, Ines, said in an announcement on Tuesday.

The country's gas storage facilities were 53% full by early September, which was the lowest since records began and far below the year-ago level of 71%. Ines said that a fill level of 77% is feasible by Nov. 1.

That would be less than the storage capacity that has been booked, at 83%. Ines said that the 77% fill level will eventually no longer be achievable once more time has passed.

Ines suggested reducing or scrapping various levies and fees which are paid as part of gas logistics processes.

With the Strait of Hormuz now all but closed for six months and counting, market participants will be watching for the intensity of competition between Europe and Asia for liquefied natural gas to gauge how much reserve Europe can build before winter.

Bloomberg reported on Monday that the German government is in talks with two energy companies it now owns since the energy crisis in 2022, Uniper and Sefe, to consider how to boost gas inventories, according to sources with knowledge of the talks.

There is no plan for the government to mandate the companies to buy gas on its behalf, the article said and further talks are scheduled to take place in the coming weeks.

The sources said it was not clear whether the government would seek to intervene more directly, closer to winter.

Sefe declined Bloomberg's request for comment and did not immediately reply to a request from.

Uniper toldin an email that it maintains dialogue with state authorities on gas supplies, but there were "weak economic incentives" to inject gas volumes into storage.

"In our view, the most effective way to support storage levels is a stable and market-oriented framework that creates reliable incentives for storage bookings and injections. Whether additional measures are required is ultimately a matter for policymakers," the company said.

The government is likely to be cautious about creating even a perception that it might intervene in the market after speculation alone that it might do so caused significant price swings and left storage filling unprofitable, the Bloomberg article said.

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