Germany must regulate gas storage to secure supplies - Habeck

French Economy and Finance Minister Le Maire and German Economy and Climate Minister Habeck in Paris
German Economy and Climate Minister Robert Habeck gestures as he speaks during a joint news conference with French Economy and Finance Minister Bruno Le Maire (not seen) at the Bercy Ministry in Paris, France, February 7, 2022. REUTERS/Sarah Meyssonnier

DUESSELDORF, Feb 21 (Reuters) - Germany must introduce regulation that commits its privately operated gas storage facility to have full capacity before winter to avoid the kind of energy crunch gripping the country, Economy Minister Robert Habeck said on Monday.

Germany's gas storage facilities are at historically low levels and fears that a possible war between Russia and Ukraine could worsen an energy crisis in Europe has raised the pressure on Chancellor Olaf Scholz to secure supplies.

"The storage facilities should be full and we must have an option to control the filling up of the reserves," Habeck said in a speech to business leaders in the western state of North Rhine-Westphalia.

Germany, which relies mainly on Russian gas for heating and manufacturing, fears that Russia could retaliate against any Western sanctions over its planned recognition of two Russia-backed breakaway regions of Ukraine as independent entities by cutting supplies to Europe.

An energy crunch in Europe that drove up prices resulted in Germany entering the winter months with low reserves, which at the start of February stood at just under 35% full, the lowest ever for this time of the year.

The storage industry is privately organised but handling fees for storage services are regulated.

Habeck said regulation requiring the private sector to ensure storage facilities are full was a better option than the state buying gas to secure supplies. He said there was enough gas for this winter.

The Kremlin has said President Vladimir Putin plans to shortly sign a decree recognising the eastern Ukrainian regions of Donetsk and Luhansk as independent entities, raising the risk of Russian troops entering Ukraine and sparking a war.

Options for the state to intervene in both boosting storage and withdrawals are limited under current rules.

High prices and low gas stocks have also stoked fears that industry and households could run short, or pay over the odds, for supplies.

Germany's 24 billion cubic metres of gas storage capacity equates to around a quarter of annual domestic consumption.

Writing by Joseph Nasr; Editing by Richard Chang

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