“It is a historic step: we are benefiting from the collective economic weight of the European Union to increase our energy security and combat high gas prices,” said Maros Sefcovic, Vice-President of the European Commission.
On Wednesday, the European Union launched the first international tender to buy gas collectively, covering the total demand of about 80 European companies, in order to obtain better prices for replenishing stocks before the winter of 2023-2024.
This mechanism is part of measures taken by the twenty-seven countries last year to respond to the energy crisis resulting from the rise in gas prices after the Russian-Ukrainian war, and the significant decrease in Russian gas supplies.
“It is a historic step: we are benefiting from the collective economic weight of the European Union to increase our energy security and combat high gas prices,” said Maros Sefcovic, Vice-President of the European Commission.
Within the framework of the first call for proposals, related to expected deliveries between June 2023 and May 2024, 77 European companies submitted their requests with a total volume of about 11.6 billion cubic meters of gas, including 2.8 billion cubic meters of liquefied natural gas, and 9.6 for pipeline deliveries.
International gas suppliers, with the exception of Russia, have now been invited to respond to this aggregate demand by submitting their bids by May 15th.
The best ones will be sent to clients’ companies for business discussions until the deal is completed.
Sefcovic said the Brussels-run platform helps European companies, particularly in energy-intensive industries, “build new business relationships with alternative suppliers” as the EU seeks to wean itself off its dependence on Russian gas.
Combined demand allows small, isolated companies to enjoy greater visibility and weight in the energy market.
On the other hand, Sivkovic stressed that the mechanism “allows international suppliers the opportunity to expand their customer base,” stressing the “great interest” expressed by about 100 registered potential suppliers.
New bids will be invited every two months until the end of the year, according to Brussels.
According to regulations completed in mid-December, EU countries participating in this aggregate demand mechanism must have at least 15% of the volumes required to reach the EU’s filling target (Europeans must fill 90% of their reservoir capacity by November).
This European “collective procurement” should also allow avoiding the situation that prevailed in the summer of 2022, when countries and companies rushed to the gas market at the same time to fill their stocks, which led to a rise in prices.
European Union companies, but also companies from the European Energy Community (Ukraine, Albania, Bosnia, Kosovo, North Macedonia, Georgia, Moldova, Montenegro and Serbia) can participate in collective applications.
