By Geoffrey Smith
Investing.com -- Germany is making good progress in filling its gas storage facilities and won't face a national gas shortage this winter, a top official was quoted as saying on Tuesday.
"We are making good progress with injection and consumption reduction," Torsten Frank, head of Trading Hub Europe, the company that coordinates the activities of Germany's trunk gas pipeline networks, told the Rheinische Post newspaper. "I'm very confident that private households won't have to freeze this winter."
Frank's comments come after a fresh surge in gas prices across Europe on fears of a prolonged shut-off of Russian gas supplies, after gas monopoly Gazprom (MCX:GAZP) said last week it would close the Nord Stream 1 pipeline for three days for unscheduled maintenance at the end of August. Russia has dialed down supplies in response to U.S. and EU sanctions on it for its invasion of Ukraine six months ago.
Benchmark natural gas futures for northwest Europe cooled a little on Tuesday, falling 3.3%, but are still up over 40% in the last two weeks at 267 euros a megawatt-hour - or $454 per barrel of oil equivalent.
The German government has set the target of having the country's gas storage facilities 95% full by November, the start of the peak heating system.
"We will be able to fill many storage facilities up to 95% by November, but not all," the Post quoted Frank as saying, adding that he couldn't rule out some regional shortages.
The government's emergency plan foresees households taking priority over business if there isn't enough gas to go around. The threat of supply interruptions has played a big role in the collapse of German business confidence in recent months, and was evident again in a drop in new orders in S&P Global's purchasing manager survey for August, which was released earlier Tuesday.
Bundesnetzagentur, the grid's regulator, is still warning that both households and businesses face another steep rise in energy prices, however. A new levy on gas, agreed earlier this month, will add a further 10% to customers' energy bills, taking them to over 5,000 euros ($5,000) a year.
"The situation is tense and a further deterioration can't be ruled out," it said in a regular update on its website.
That may yet test the commitment of Germany's population to supporting Ukraine's continued resistance. A poll by research firm Politbarometer for the TV channel ZDF showed that 71% of Germans still think that Ukraine should be supported.