Minister of Economy and Environmental Protection Tomislav Ćorić has made a decision that allows the state to fill the underground gas storage Okoli if leaseholders do not do it. They do not do so now as elsewhere in Europe because it is not worthwhile due to high gas purchase prices.
The decision to declare an early warning regarding the level of crisis situations in the protection of the security of gas supply in the Republic of Croatia was published in the Official Gazette on Monday and entered into force today.
It was adopted on the basis of the Intervention Plan in order to respond in a timely manner to potential disruptions in gas supply. As part of that plan, and given Russia's aggression against Ukraine, a crisis team has been set up to monitor security of gas supply and has proposed a decision, according to the Ministry of Economy and Environmental Protection.
The crisis team ordered that storage capacities must be filled in accordance with the filling curve up to the level of minimum occupancy of the PSP Okoli facility of 90 percent at the beginning of the heating season, until November 1, 2022.
Leaseholders of storage capacities are obliged to fill the capacities they have contracted so that they have filled 63 percent of the capacity by August 1, 68 percent by September 1, 74 percent by October 1 and 90 percent by November 1.
Pursuant to the order of the Crisis Team, leaseholders of storage capacities will report to the Ministry of Economy and Sustainable Development on the use of their contracted storage capacities within seven days of receiving the Decision on Early Warning, by determining exactly which leased capacities they plan to use and declare dynamics of filling capacities that must not be less than regulated.
If leaseholders do not plan to use the leased capacities, they are obliged to inform the Ministry within seven days from the day of receiving the decision on early warning, thus losing the right to store gas in PSP Okoli and will release the leased capacities in favor of forming strategic gas reserves.
The Okoli underground gas storage facility is now commercially available, but leaseholders have not started filling it due to the high price of gas.
Namely, it is common for leaseholders to inject gas in the period of lower market gas prices, ie outside the winter heating season, and sell it more expensively in the season, paying the cost of storage on the difference in price. However, this year, due to special circumstances caused by rising prices, the storage facility is not being filled, although it is 100% leased. This is worrying because filling Okoli takes a full four months.
Okoli is a strategically important facility especially in extraordinary circumstances. Namely, supply can be realized without a warehouse, but with a regular supply of contracted quantities, which in the current circumstances is not something that could be wagered on with certainty.
Therefore, it is important that the storage starts to fill up on time and this decision serves that, meaning leaseholders who do not want to inject gas into the area will have to "release" the capacity they have reserved, and the state will have to find funds to fill the vacated capacity, most likely through state-owned companies or agencies that have dealings closest to the gas business.
In this case, storage capacities will be converted into strategic stocks.
The maximum designed working volume of the Okoli warehouse is 553 million cubic meters.
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