Shell’s chief executive officer, Ben van Beurden has said that as a consequence of the reduced gas supply from Russia, the option before Europe is to engage in energy rationing given the ensuing scramble to fill natural gas storage sites before November.
“It will be a really tough winter in Europe. Some countries will fare better than others, but we will all be facing a very significant escalation in energy prices,” van Beurden said at the Aurora Spring Conference yesterday (Thursday) in Oxford.
Following the pressure from the EU, who are placing graduated sanctions against Russia for invading Ukraine, the former slashed gas supply to Europe in the middle of June and is not currently sending any gas via Nord Stream as the pipeline is undergoing regular maintenance until July 21.
The EU and its major importers of Russian gas are concerned that Gazprom will not resume flows through Nord Stream once the maintenance period is over, or could further slash supplies.
Europe is turning to America and African nations for gas supply. A document said Europe is importing “record volumes of U.S. LNG, and signing deals with North African gas suppliers to boost deliveries.”
Still, the EU could struggle to fill its gas storage to 80% by November 1, per the new EU recommendations after the Russian invasion of Ukraine. Data from Gas Infrastructure Europe said that as of July 13, gas storage in the EU was 62.6% full.
Beurden isn’t the first industry leader t warn of what is ahead of the EU sanctions against Russia in view of the gas supply from the latter.
Executive director of the International Energy Agency (IEA), Fatih Birol, told Financial Times last month that Europe could be forced to start rationing energy in the winter, starting with industrial uses of natural gas, especially if the winter is cold and China’s economy rebounds.
A number of European countries including its biggest economy Germany have started urging residents to take voluntary measures to conserve energy, to contain the demands of coming winter.
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