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(Bloomberg) — Germany’s largest gas storage facility failed to allocate capacity at its latest auction, raising risks that the country will struggle to meet legally binding stockpiling targets ahead of winter.
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The Rehden site in northern Germany remains almost empty, with only a small portion of capacity booked so far this year. Its operator, state-owned Securing Energy for Europe GmbH, didn’t specify the reasons for Thursday’s failed auction, but said after a previous round that offers outstripped what was allocated, signaling it may be waiting for higher prices.
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SEFE announced the auction earlier this week when European gas prices were higher amid fears that the conflict in the Middle East might escalate and cause supply disruptions. The market has since plummeted, with a ceasefire between Iran and Israel appearing to hold. That could have made offers less attractive.
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The auctions are closely watched as Europe’s biggest energy consumer is lagging behind peers such as France and Italy in rebuilding gas inventories ahead of the next heating season. While the stockpiling campaign continues, Germany’s vast storage sites are about 49% full for now — the lowest level for this time of year since 2021.
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Earlier this week, European Union negotiators agreed to give member states more flexibility to meet gas-storage targets. Rehden is currently just above 2% full, well below its goal of 45% by Nov. 1. It also takes longer to fill than some other sites due to being a porous facility.
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German officials and energy companies have repeatedly said they expect supplies to be sufficient this year. Yet traders remain on alert amid speculation the state may have to intervene at some point if winter reserves continue to disappoint.
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—With assistance from Elena Mazneva.
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