Germany’s gas storage facilities show a level of more than 95 percent – an apparently very expensive undertaking. According to a media report, the company responsible for purchasing has unnecessarily driven up the prices.
Actually a reason to celebrate: Germany’s gas storage facilities are almost full. Although Russia has turned off the gas tap, the gas storage facilities are more than 95 percent full. However, according to “Spiegel” information, when filling up the gas storage facility, carelessness is said to have driven up the prices unnecessarily.
The company Trading Hub Europa (THE) was commissioned by the state to buy large quantities of gas on the market from May to October. With billions in tax money, the company bought gas for Germany without offering the large quantities of gas for sale again, as professional traders would do, directly via futures contracts on a specific date in the future, reports the “Spiegel”.
As a result, gas was taken out of the circuit at exactly the same time as deliveries from Russia were halted.
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Traders use futures contracts to ensure that they can get rid of their gas at a certain price in the future. The government-commissioned company THE, on the other hand, did not want to protect itself when purchasing and did not use futures contracts. That’s probably what drove gas prices up.
According to the “Spiegel”, the company is said to have bought a quarter of the gas volume that was consumed in Germany at the same time for Germany’s largest gas storage facility in Rehden on several days at the beginning of August. Andreas Schroeder from the energy analysis company ICIS tells the Hamburg news magazine: “This has definitely led to a further shortage”. The gas shortage was exacerbated by THE gas purchases.
The effects were felt quickly: at the end of August, prices rose to a record high of more than 300 euros per megawatt hour. Eventually, gas suppliers like Uniper ran into financial difficulties. A few weeks later, Uniper was then nationalized by the federal government.
According to “Spiegel”, however, it is not possible to answer how large THE’s contribution to the exploding gas prices was. Finally, many other factors would affect the price of gas.
THE’s purchasing strategy is also incomprehensible to industry experts: After all, the supply was just as secure with futures contracts as without. If the gas sold on a forward basis is needed, the contracts can simply be sold on the market, according to the “Spiegel”. In this case, the new owner of the contract would have to deliver gas on the agreed date and not THE.
Recently, the futures market prices for the coming winter have fallen – so the expensive gas bought in German storage facilities has now lost value. Gas expert Schröder emphasized to the “Spiegel”: “If THE had already secured the withdrawal for the winter during the summer months, they would have achieved much higher income”.
At the request of “Spiegel”, THE co-boss Torsten Frank rejects the allegations: According to him, the top priority was to fill the gas storage tanks at all. “The sale on the futures market is now the next step,” says Frank. According to him, there is a certain risk of loss with futures transactions: it could happen that contracts have to be shifted to higher prices if you use more gas yourself, he explains to the “Spiegel”.
According to the “Spiegel”, government circles say that THE initially had no capacity for forward transactions. The company would have lacked technology and know-how. THE was only restructured when the Federal Network Agency exerted pressure. Since the German gas storage facilities are now around 95 percent full, THE’s restructuring is probably too late.