German gas trading hub to sell up to 37 TWh of gas from storage

(Reuters) - Germany's gas market trading hub, Trading Hub Europe, is planning to start selling the first volumes of gas stored under a government mandate agreed in 2022, when it was tasked with ensuring sufficient supplies as flows from Russia dwindled.

THE said it would sell up to 37 terawatt hours (TWh) of the gas in its storage, or around 15% of total German capacity.

"The exact volume of sales will depend on the development of the markets and prices in the winter of 2023/24, among other things. THE is continuously liaising with the authorities in this regard," the company told Reuters.

Faced with the prospect of a supply shortage as Russian gas deliveries to Germany slumped last year, Berlin mandated THE to buy and store gas.

THE, whose owners include gas grids Gascade, Open Grid Europe and Gasunie, started in 2021 administering feed-in and withdrawals of gas in a unified national zone on behalf of pipeline grid companies under the watch of the energy regulator.

That function was expanded in last year's supply crisis to implement emergency measures.

Sales will take place in coordination with the BMWK (Economy Ministry) and the Federal Network Agency, THE said.

LSEG analyst Ulrich Weber said the law stated that THE has to wait at least two weeks after the notification before it can start selling, but has to start by Jan. 1 at the latest.

"We expect THE to sell at times of withdrawals from storages, hence until some time in March-April, which would result in roughly 300GWh/d (gigawatt hours per day) of additional supply," Weber said.

The news contributed to winter gas contract prices falling, a European gas trader said.

German storage operator INES said earlier this month the country's gas caverns were completely full ahead of winter for the second year running, and that only extremely cold temperatures could lead to a shortage of supply.

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