| PARIS, April 12
PARIS, April 12 France could face a tight gas
supply in the 2017/18 winter period because suppliers do not
have enough reserve storage capacity as required by law to meet
demand if there is a prolonged cold snap, said major gas storage
Storengy, a subsidiary of French energy group Engie
which develops and operates gas storage facilities,
said that less that 50 percent of its storage facility had been
reserved for the coming winter.
"To date, only 42.7 terrawatt-hours (TWh) of storage
capacity has been sold for the 2017/2018 winter season, thus
French storage capacity is less than 50 percent full," Storengy
chief executive Cecile Previeu told journalists in Paris.
"The low level of reservations, if it were to remain, would
not be enough to meet demand during a cold snap in winter," she
said. "If by summer we don't have more storage reservations, we
will not have enough reserves for winter," added Previeu.
France had to depend heavily on those storages in the past
2016/17 winter to keep heating and power generation going.
The situation was particularly acute in southern France,
where the gas hub contract hit a record high in January
as supply tightened after a force majeure disruption in Algeria
and tensions in the global gas market.
Previeu said that if something similar happened with the
current storage levels, France could face power outages.
In order to guarantee a security of supply during cold
winter months, French gas suppliers are obliged by law to import
and store gas to meet demand.
They must also reserve storage, and start injecting gas into
storages months in advance as the overall process is slow.
In the past, suppliers could make their margins by buying
cheaper gas during the summer months, pay and store it and then
sell it on during winter when prices are higher, she said.
But gas prices have fallen and the spread between winter and
summer prices have narrowed. A planned reform of the French gas
storage sector collapsed last year, leaving suppliers with
little incentive to continue to pay for storage.
Previeu said the French government must compel suppliers to
respect their obligations to reserve storage, while attempts to
revive the reforms continue.
Storengy, which operates 21 storage sites in Europe
including 14 in France, recorded 2016 revenues of 1 billion
euros. It specialises in underground natural gas storages using
salt or rock caverns and depleted oil and gas fields.
($1 = 0.9434 euros)
(Reporting by Bate Felix; Editing by Sudip Kar-Gupta)