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IEA ministerial meeting: CEE Ministers discuss global LNG supply amid China’s economic rebound

On 15 February 2023, energy ministers from around 40 countries – including Romania and Ukraine – took part in a ministerial meeting on Gas Markets and Supply Security, under the auspices of the International Energy Agency (IEA).

The Ministers discussed additional ways to work together in solidarity to limit the impacts of the energy crisis following Russia’s invasion of Ukraine and proposed measures to address the global impacts of the energy crisis in support of countries affected worldwide, maintaining momentum on a clean and sustainable energy transition.

Participating ministers considered the IEA’s analysis of natural gas supply and demand dynamics, and concurred with the need to coordinate plans to mitigate the risks associated with the unpredictability of Russia’s use of energy as a weapon of political coercion. Such risks need to be assessed in the context of the short-term limited global liquefied natural gas (LNG) supply capacity additions and uncertainty related to the rebound of China’s economy and its potential impacts on global gas demand, the IEA said.

“During my intervention, I conveyed that the current regional crisis highlighted the vulnerability of the energy sector to geopolitical events, in all its dimensions. And yet in the European energy sector, significant transformations took place, which constituted a starting point for a new model of international cooperation, unprecedented in the energy field, bringing, more than ever, to the forefront of our attention, security energy and the importance of diversifying energy supply sources and routes,” the Romanian Energy Minister Virgil Popescu said.

Alongside Romania and Ukraine, the meeting was also attended by ministers from Bulgaria, Croatia, Latvia, Moldova, Romania, Slovenia and Ukraine and the EU represented by the European Commission. 

“Our country has an operational and viable gas transport infrastructure that can contribute to regional energy security, with Romania already functioning as an important regional gas supply hub, transporting gas to the Republic of Moldova, Ukraine, Hungary and further to Slovakia. In these unprecedented times of volatility and transition, partnerships between governments and energy companies remain essential to ensure an open dialogue on an agenda that must drive investment, energy security, transition and innovation. At the same time, I conveyed to the participating ministers that our country remains engaged and contributes to the stabilisation of European and regional energy security, as well as to achieve the desired continuity of energy supply,” Minister Popescu added.

Ukraine’s potential role as Europe’s energy storage provider

Ministers agreed that energy savings and improved energy efficiency are the first fuel and accelerating the clean energy transition is vital. They welcomed the successful response by the EU and others to the energy crisis in key areas of energy policy, from the security of supply and gas storage to gas demand reduction and improved price transparency, faster deployment of renewables, and by targeted upgrades of energy infrastructure.

In the context of diversifying Europe’s energy supply, the Ukrainian Energy Minister, German Galushchenko, highlighted the potential role of Ukrainian underground gas storage and the gas transportation system for foreign partners. “Ukraine manages the largest underground gas storage facilities in Europe. Their total capacity is 31 billion cubic metres (bcm). About 80 per cent of the capacities of our PSG are located on the western border. Convenient logistics make Ukrainian storage facilities a natural part of the EU gas market,” he said.

Minister Galushchenko added that competition for free energy resources on the world market is increasing, which will also affect prices. Therefore, it is necessary to start contracting for the next heating season using the existing infrastructure.

According to the IEA, further, coordinated actions are being prepared to support an orderly storage-filling season in the northern hemisphere to enhance European and global energy security, improve global energy affordability, minimise supply disruptions, and leverage transparent and competitive energy markets to minimise the negative impacts of price volatility on consumers, while recognising the specific needs of price-sensitive purchasers.

The IEA said that it will monitor the advancement of countries implementing options available and the ongoing situation of the gas crisis, and the Ministers agreed to reconvene, if necessary.

Ministers also noted that the current gas crisis has made it clear that clean energy transition and increasing stability in the global LNG market, specifically security of supply and price stability, is a common task for all gas-producing and consuming countries in the world. Moving forward from this meeting, Ministers will continue the discussion concerning additional countries impacted by the global energy crisis. Future discussions will take into account longer-term perspectives and opportunities for dialogues between gas-producing and consuming countries, with the objective to avoid repeating the current crisis, the IEA confirmed.  

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