Natural gas may cost more than last winter as European storage levels lag
Low natural gas storage levels across Europe and geopolitical uncertainty could keep prices higher than last year throughout the heating season. Latvenergo stresses, however, that Latvia faces no risk of physical gas shortages.
There is a strong likelihood that natural gas prices in Europe will remain higher this heating season than last year, according to Latvenergo's Electricity Market Review. Rodika Prohorova, head of the company's Portfolio Management division, explains that the main risk is not gas availability itself but its elevated price, which could persist until the end of the 2026/2027 heating season.
Low storage levels and geopolitical tension
According to data compiled by the European gas infrastructure operators' association GIE, EU gas storage facilities were only 66.9% full as of September 7 — the lowest level since 2021. Prohorova notes that since late February, storage replenishment has been hampered by developments in the Middle East, including risks in the Strait of Hormuz and disruptions to liquefied natural gas supplies. Uncertainty over future price trends has led many European gas suppliers to delay purchases while waiting for the situation to stabilize.
Rising exchange prices
This has been reflected in TTF exchange prices: the next-month contract averaged about 67 euros per megawatt-hour in week 35, rising to around 76 euros by week 37, and touching 78 euros on one trading day. Still, Prohorova points out that these levels remain well below the historic highs recorded during previous energy crises. She warns that prolonged high prices could raise bills for households and industry, fuel inflation, and weigh on Europe's economic growth.
Supply secured for Latvia
Prohorova stresses that the risk of a physical gas shortage in Latvia is low, thanks to the Inčukalns underground storage facility, the Klaipėda LNG terminal, and Latvenergo's long-term supply contracts. In 2022, the company secured rights to receive six terawatt-hours of gas annually from the Klaipėda terminal through 2032, supplementing supplies via Finland's Inkoo terminal and the Poland-Lithuania gas interconnector. Latvenergo says it has secured the necessary volumes for both power and heat production and retail customer demand for the 2026/2027 heating season. In 2026, the company also obtained rights to an additional four terawatt-hours per year from the Klaipėda terminal for the 2033-2044 period, further strengthening long-term supply security.
