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7 Mar, 2023 12:03

EU creating gas-buying cartel – Bloomberg

The bloc is hoping to clinch first deals in June with suppliers from the US, the Middle East and Africa, the outlet reports
EU creating gas-buying cartel – Bloomberg

EU member states are moving towards joint gas-buying by launching the first tender next month, Bloomberg reported on Tuesday.

The measure is aimed at reining in last year's surges in the price of gas, which occurred as a result of anti-Russia sanctions and of the EU policy of abandoning Russian energy. The bloc expects first contracts with suppliers from the US, the Middle East and Africa to be signed around June, according to the media outlet.

“We clearly need to turn the economic tide in Europe,” European Commission Vice President Maros Sefcovic noted, adding that he believes that a new system “will increase competition and bring in new suppliers and push energy prices down.”

After months of discussions on how to secure natural gas supplies, the EU will begin its joint gas purchases in April, with plans to conduct joint buying on a regular basis in the future, Bloomberg said.

March 15 will see it launch registration on the energy platform for companies interested in buying gas and, in April, according to Sefcovic, the bloc plans to “open [the] window of the platform where companies present formally how much gas they will want to buy through the first tender.”

According to him, about 50 international energy suppliers have expressed interest in selling gas to the EU via a special platform. While the bloc currently has its underground storage facilities around 61% full, largely due to a mild winter, the main concern is to secure sufficient gas inventories for the next heating season.

Over the next three years the 27-nation bloc will need approximately 24 billion cubic meters of gas, according to preliminary estimates, which is a huge volume for a spot market.

While the member states are hoping that the scheme of joint gas-buying will help make prices “reasonable,” economists worry that, with the huge demand for gas in the EU, such bulk buying would, instead of cooling them, actually push prices higher.

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