French energy giant warns of winter gas shortages

The EU may face gas supply constraints this winter, TotalEnergies СEO Patrick Pouyanne has warned during a speech at the ‘Economic Meetings of Aix-en-Provence’ forum on Sunday.

According to Pouyanne, even if gas storage in the region is at full capacity by the start of the heating season, it may not be enough to last through a cold winter.

“As for gas, storage facilities will be full in October, but if the winter in Europe is cold, these reserves on the continent will not be enough to meet demand throughout the winter season,” he warned.

Pouyanne noted that while this does not necessarily mean the EU will run out of gas, the bloc would likely have to import additional supplies at higher prices, stressing that “there are no friendly prices in a market where everything depends on supply and demand.”

Following the beginning of the conflict with Ukraine and subsequent anti-Russia sanctions, the EU sought to lower its dependence on Russian gas, which previously made up nearly a half of all the bloc’s gas imports. As a result, European governments increased imports of liquefied natural gas (LNG), much of it from the US. In 2022, the EU scooped up 64% of American LNG exports, according to the CEO, more than doubling imports against 2021.

However, according to Pouyanne, the upcoming presidential elections in the US may jeopardize the country’s LNG exports, which could be limited in order to stem the rise in fuel prices on the domestic market.

“If the Republicans decide to stop exports, there is a major systemic risk,” he warned.

Overall, Pouyanne noted that it would be wise to continue saving energy in order to avoid shortages this coming winter.

“We must save energy. The French were able to save 15% of energy last year, because of the high prices: when you have very high prices, you start to save. The challenge now is how we are going to maintain this effort to stave off the next crisis.”

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