Slovakia mandates national supplier SPP to store 17.5 TWh of natural gas

The Slovak government has established a mandatory natural gas storage schedule for state-owned utility Slovenský plynárenský priemysel (SPP) to ensure energy security through the upcoming winter, wrote Brendan A’Hearn, gas market specialist at ICIS.

SPP must hold 5.6 terawatt-hours (TWh) by 1 July, increasing to 13 TWh by 1 September, and reaching a peak of 17.5 TWh for at least one day between 1 October and 1 December, according to DennikN.

The final target represents approximately 1.6 billion cubic metres of gas. While SPP requires only 8 TWh to meet its own portfolio needs, the government is forcing the additional 9.5 TWh to safeguard the national supply. Officials noted that current market conditions, specifically low summer-winter price spreads, make such large-scale storage financially unattractive for commercial entities.

To mitigate this, the state will compensate SPP for the net costs associated with the additional volume, including storage capacity bookings and commodity losses. The government expects these obligations to cost roughly 64 million euros. The compensation will likely be managed by reducing the dividend payments SPP provides to the state treasury.