The Netherlands has approved a subsidy of as much as €993 million ($1.2 billion) for state-owned energy company EBN Capital BV to bolster the country’s depleted gas reserves.
EBN has been authorized to store up to 80 terawatt-hours of gas, “if the market fails to do so sufficiently,” Dutch Climate Minister Stientje van Veldhoven said in a letter to parliament Thursday. “EBN’s role should therefore be viewed as a supplementary safeguard.”
Benchmark European natural gas has surged about 50% since the start of the Iran War, slowing progress in replenishing the region’s gas storage sites ahead of winter. The region’s inventories are just over 40% full, well below the five-year seasonal average of 54%, while competition with Asian buyers for liquefied natural gas cargoes looks set to intensify as flows through the critical Strait of Hormuz remain effectively halted.
The move by the Netherlands is the latest sign that countries in Europe are stepping up support for gas stockpiling over the summer. Italy and France’s gas reserves are above the European Union average after they implemented programs to spur injections, while Germany has said it won’t intervene.
The Dutch government subsidy comes as high prices deter private companies from stockpiling, the minister said. Storage sites in the Netherlands are currently less than 16% full, compared with well over 36% last year, according to data provided by the country’s national energy monitor.
“I have given EBN the flexibility to operate even with a slight negative trading result,” Van Veldhoven said, adding that gas storage is expected to be more expensive this season than in previous years. “The costs incurred by EBN for storing gas in the storage facilities will ultimately be passed on to Dutch gas consumers.”
The Netherlands is targeting 115 terawatt-hours of gas in storage facilities by the start of the heating season on Nov. 1.
Additionally, the minister has asked EBN to fill a temporary emergency gas reserve of 5 terawatt-hours. There is sufficient budget to keep that strategic reserve — which can only be deployed in the event of physical shortages — until April 2032.
A ministry spokesperson clarified that an additional €155 million will be made available for the country’s emergency gas reserves.
Meanwhile, shareholders Royal Vopak NV and Gasunie are inching closer toward keeping an LNG terminal in Eemshaven open longer until 2036, instead of 2027. Both parties signed a conditional investment decision Monday, subject to obtaining the necessary permits.