The follow up study of the LNG and Storage Strategy is focusing on the latest developments of the gas market and their impact on the actions formulated in the Strategy. Under the modelled scenarios the European infrastructure can robustly serve the needs of the gas system even under the most extreme demand and supply shocks. Modelling did not point to any additional infrastructure need besides the ones identified by the strategy. Increasing competition of flexibility sources might outcompete some storage facilities, and this must be closely monitored, but we see no urgent risk on supply security in this regard. To increase storage use storage obligations are in place in several Member States. Modelling results underpin the need for many of these obligations in the modelled security of supply scenarios on the short run. We also found, however, that these storage obligations are in some cases hindering cross border use of storage and worsen the business case for other countries’ storage facilities where no storage obligations exist. For this reason, we have described an alternative regulatory solution in this study that could potentially replace storage obligations with EU-wide, VOLL-based firm and obligatory financial compensation for protected customers by suppliers. The LNG industry is in the process of substantial industry change, because of an oversupply crisis, new LNG technologies and the entry of substantial volumes of low cost US LNG. The study considered how liquidity, flexibility and transparency can be improved in European and global LNG markets.

Available at the website of the European Commission

Executive Summary

Comments of stakeholders

Main conclusions are available on our website.