(Reuters) Shell CEO Wael Sawan said that Europe is heading into winter in good condition from an energy point of view with high storage levels and good renewables output, but achieving long-term energy security remained a challenge.
Buying record amounts of liquefied natural gas (LNG) to replace curtailed Russian flows helped Europe safely weather the first winter of the Ukraine conflict.
The continent has ended the winter of 2022/23 with a record volume of gas in storage – which leaves much less refill needed ahead of the next heating season in 2023/24.
“We are going into this European winter in a good place in the sense that renewable generation continues to grow …(and) at the same time storage levels are approaching historic highs,” Sawan said during a news conference on second-quarter earnings.
“If we continue at the trend that we’re on right now, we should expect storage levels in Europe to get past 90%,” he added.
With EU gas storage currently slightly over 84% full, the continent is on track to reach 90% full storage by Nov. 1, which has helped relieve the upward pressure on prices.
Sawan, however, said that the big question is what happens in the coming years, which depends largely on demand from China, where industrial demand has remained soft. A rebound in Chinese demand could sharply tighten the LNG market.
“There’s a bit of a reprieve for now…(But in the) longer term, we need to continue to make sure that Europe is investing in the infrastructure to give it the resilience into the future,” he said.
The challenge facing Europe is to create an energy policy for several years that provides both energy security and energy affordability while fulfilling EU commitments around lower carbon and lower emissions, he added.
Read More: Shell CEO says Europe heading into next winter in ‘a good place’