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German gas plan calls for network upgrade, storage

  • Märkte: Natural gas
  • 01.04.14

The association of German transmission system operators (FNB Gas) will submit its draft of the 2014 national development plan for gas to national regulatory agency Bundesnetzagentur (Bnetza) today.

Germany's gas pipeline operators submit a network development plan assessing the country's future transport and storage capacity needs to Bnetza every year. This year's draft has identified the need for more network upgrades, specifically low to high-calorie gas conversion. The draft assumes that additional volumes of high-calorie gas will be needed to substitute falling low-calorie gas supplies.

Germany's limited production of low-calorie gas has begun to decline, and Dutch exports of low-calorie gas are expected to slide because of the yearly Groningen production cap introduced this year. Groningen produces low-calorie gas, and its exports have in the past provided much of Germany’s low-calorie supply flexibility.

The plan also suggests an increase in gas storage capacity, as well as modifications to current storage infrastructure. But some have argued that Germany is already over-endowed with storage capacity, which has compressed summer-winter spreads in recent years.

At the Gas Transport and Storage summit in Berlin last week, Michael Kohl of RWE Gas Storage predicted that several storage facilities in Germany would close over the next two years. And as recently as October, FNB criticized some of Bnetza's core assumptions underpinning the scenarios used to develop the grid development plan, arguing that they could result in an over-estimation of the need for storage. Capacity expansion plans are made on the basis of current firm capacity bookings. But storage holders often cancel booked capacity, so this measure would overestimate the need for new storage capacity and could lead to oversupply and excessive costs, FNB said.

Market participants will have the opportunity to raise any concerns during the next round of consultations. Bnetza will open consultations over the current version of the draft by the end of April, concluding the process by the middle or end of June, FNB said. The results of the consultation will be published in July.

The network developments suggested in the draft would cost approximately €1.8bn ($2.5bn) by 2019, and a total of €3.1bn by 2024.

jr/cm/fn

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