Wintershall Dea CEO: 'Insane' Prices Will Make People Abandon Gas
(Reuters) — Wholesale gas prices have scaled "insane" levels that will ultimately hurt demand, although the lack of Russian gas means Europe's supply will be tight for several years, the CEO of German oil firm Wintershall Dea said on Tuesday.
The benchmark European gas contract has risen by more than 300% in a year and on Friday touched a record high of 343.08 euros per megawatt hour (MWh).
On Tuesday it fell to 259 euros/MWh, as Europe almost reached its target of filling gas stores to 80% as a security policy ahead of the peak demand winter months, but prices remain well above normal levels.
"The prices we are having currently are insane. That is nothing even a gas producer is looking for because in the end, we are going to massively destroy demand for our product," Mario Mehren told reporters on the sidelines of an energy conference.
"Whoever has a chance to walk away from gas is walking away from gas and we don't know if they're coming back."
High prices have already cut fertilizer production in Europe and many other big users of gas are seeking ways to reduce consumption.
Mehren said the best way to stabilize prices was to show there is sufficient supply not just this winter, but also for the next winters.
"Because if you look into the Russian gas deliveries this year, yes, they are lower than last year, but they are not insignificant. And the big question mark is what is going to happen next year?" Mehren said.
Russian pipeline gas deliveries to Europe have fallen by some 75% this year and the Nord Stream 1 gas pipeline from Russia to Germany has been running at 20% of capacity. From Tuesday, supplies will be halted for three days of unscheduled maintenance.
Wintershall Dea holds a 15.5% stake in the Nord Stream 1 pipeline, but it is not a gas importer and Mehren said he had no insight into the reduction in flows and the upcoming maintenance.
Despite lower Russian gas supply, German gas storage was "in good shape" this year, Mehren said. Storage sites were just over 83% full as of Aug. 28, close to a German target of 85% by Oct. 1.
Lower Russian supply has been partly offset by increased production from Norway this year.
Related News
Related News

- Kinder Morgan Proposes 290-Mile Gas Pipeline Expansion Spanning Three States
- Enbridge Plans 86-Mile Pipeline Expansion, Bringing 850 Workers to Northern B.C.
- Intensity, Rainbow Energy to Build 344-Mile Gas Pipeline Across North Dakota
- U.S. Moves to Block Enterprise Products’ Exports to China Over Security Risk
- Court Ruling Allows MVP’s $500 Million Southgate Pipeline Extension to Proceed
- U.S. Pipeline Expansion to Add 99 Bcf/d, Mostly for LNG Export, Report Finds
- A Systematic Approach To Ensuring Pipeline Integrity
- 275-Mile Texas-to-Oklahoma Gas Pipeline Enters Open Season
- LNG Canada Start-Up Fails to Lift Gas Prices Amid Supply Glut
- TC Energy’s North Baja Pipeline Expansion Brings Mexico Closer to LNG Exports
Comments