EU to require countries to fill gas storage 90% before winter

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A gas burner is pictured on a cooker in a private home in Bordeaux, soutwestern France, December 13, 2012. REUTERS/Regis Duvignau

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BRUSSELS, March 22 (Reuters) - The European Commission will propose legislation on Wednesday requiring EU countries to fill their gas storage to at least 90% of capacity ahead of each winter, according to a draft document.

The invasion of Ukraine by Russia, the European Union's top gas supplier, has increased concerns about supply shocks even as EU countries have avoided sanctioning Russian fossil fuels. While Europe plans to slash reliance on coal, oil and gas this decade in line with climate goals, for now, countries are heavily dependent.

To build up a supply buffer for the next winter, Brussels will require EU countries to fill storage facilities at least 90% by Nov. 1 each year, with intermediate targets applying in the months before.

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"In the current geopolitical context, further supply disruptions of gas can no longer be excluded. This could severely harm citizens and the economy of the Union," said the draft proposal, seen by Reuters, which will need approval from EU countries and the European Parliament.

Countries will be responsible for meeting the targets, and can use options like obliging suppliers to put minimum volumes into storage, tasking transmission system operators with buying strategic gas stocks, and providing financial incentives to do so.

The Commission will step in if countries are off track. It will also remove transmission tariffs on moving gas to and from storage.

Germany, Italy, France and the Netherlands are among the EU states with large gas storage sites. Others, including Greece and Lithuania, have none.

States without storage must use facilities in other countries or develop "burden-sharing" systems where they help other countries fill storage, the document said.

EU storage is around 26% full. Companies usually refill it during summer when prices and demand ease - but Russia's invasion of Ukraine, which Moscow calls a "special military operation", has sent gas prices soaring.

Storage typically covers 25-30% of winter gas consumption, the draft said.

EU countries must also certify their storage operators - a move aimed squarely at Russian gas giant Gazprom (GAZP.MM), which owns storage sites in multiple EU countries, including roughly a fifth of Germany's capacity. Gazprom-owned storage levels have lagged below overall EU levels in recent months.

If countries' authorities consider a storage operator to pose a security risk, they can force it to dispose of its shareholdings, potentially in exchange for compensation, the document said.

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Reporting by Kate Abnett; Editing by Susan Fenton

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