Czech industry ministry seeks to raise minimum gas stocks from 30 to 45 percent due to Russian invasion

The Ministry of Industry and Trade (MPO) is preparing a decree to amend the security of gas supply standard. Minimum gas stocks in storage facilities are to be increased from the current 30 percent to 45 percent. The reason is the risk that gas transit from Russia to the European Union could be restricted or halted for an extended period. This follows from a document seen by the Czech News Agency (ČTK). The consultation process on the document ended today.

According to the explanatory report, a prolonged halt or restriction of gas supplies from Russia would create serious problems for a transitional period. „Given the absence of significant domestic gas resources, underground gas storage facilities are crucial to the security and reliability of natural gas supply in the Czech Republic. The gas stored in them is owned by gas traders, who use it during the winter period to supplement their gas purchases, made predominantly on foreign short-term and spot markets,“ the explanatory report states.

Gas traders use part of the stored gas to meet an obligation laid down by the Energy Act. They must ensure a specified share of the security of gas supply standard for their protected customers by storing gas in facilities located in an EU Member State. This share is to be increased from 30 percent to 45 percent.

The largest operator of underground gas storage facilities in the Czech Republic is RWE Gas Storage, which operates six facilities with a working volume of around 2.7 billion cubic metres. Another operator of underground gas storage facilities is MND Gas Storage, which owns and operates two storage structures. ČTK is seeking comments from the companies.

„Given the risks that currently exist, particularly regarding sufficient preparedness for next winter, an increase in this share to 45 percent is proposed. Ultimately, this should increase the security and reliability of natural gas supplies to end customers in the Czech Republic,“ the explanatory report accompanying the decree states.

The proposed change will not require expenditure from the state budget or other public budgets. The amendment is expected to have a positive impact on the business environment, as it will help increase Czechia's energy security in the gas sector.

Industry and Trade Minister Jozef Síkela (nominated by STAN) flagged the necessary increase in gas stocks in early March. „In connection with Russian aggression, it is necessary to strengthen Czech energy security and prepare as well as possible for next winter. We will increase the mandatory level of gas stocks in storage facilities and at the same time extend the period for which traders must hold them there. We will start taking the necessary steps immediately,“ he said at the time on Twitter.

The largest operator of underground gas storage facilities in the Czech Republic is RWE Gas Storage, whose facilities are currently around 12 percent full. „Gas stocks are created solely by licensed traders. The 30 percent, or potentially 45 percent, share relates to the so-called security of supply standard, not to total storage capacity,“ Simona Hladíková of RWE Gas Storage told ČTK today.

According to her, the security of gas supply standard is a mechanism intended to ensure secure gas supplies from individual traders for so-called protected customers. Protected customers include primarily households, healthcare and social care facilities, and food production operations. For these selected customer groups, traders are required to ensure part of the security standard by storing gas in storage facilities. This method should guarantee secure supplies, particularly during the winter period, i.e. the heating season.