French gas operators say supplies sufficient for harsh winter

(Reuters) - France will have enough gas supplies for the winter even in the event of severe cold weather, operators GRTgaz and Terega said on Monday, in a further indication that Europe's second-biggest economy has managed to diversify its sources from Russia.

But ensuring sufficient supplies will require substantial imports of liquefied natural gas (LNG) and further imports from Spain, coupled with smart storage management and relatively low consumption levels on par with last year's, the operators said.

Russia's invasion of Ukraine, which led to Europe cutting most energy ties with Moscow, caused serious fears about France's gas supplies last winter. Savings efforts enforced by the government, along with mild weather and high prices in 2022 helped reduce gas use by 9.3%.

The "Ecogaz" savings scheme, aimed at keeping domestic and professional consumers alert to potential network tensions, will stay activated this winter, the operators said.

Scenarios from GRTgaz and Terega factor in a storage fill level of 95% and the commercial commissioning of TotalEnergies' planned floating LNG terminal in Le Havre.

In the event of a late cold peak, temporary shortages could occur if stocks are overly depleted early in the winter.

After experiencing steep increases since mid-2021, gas prices have fallen since early 2023, with the market currently projecting levels around 50 euros/MWh for winter 2023-2024, representing a 30% decrease compared to winter 2022-2023.

European Central Bank (ECB) President Christine Lagarde said on Sunday that Europe's improved winter gas reserves were contributing to an easing of euro zone inflationary pressures.

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