Gas buyers, unite

In November last year, the European Union’s energy ministers shook hands on a deal to implement a gas-buying platform across the bloc in a bid to make future gas supply for member states more secure in the context of a major reduction in Russian gas flows.

The official documents about what is commonly known as the joint gas buying scheme or, if you prefer, platform, talk about pooling demand, avoiding shortages, keeping gas prices low for all EU members, and, of course, solidarity. In effect, however, the joint gas buying push appears to be a tool for the further centralisation of decision-making in the European Union. That’s not necessarily a good thing.

On the face of it, the joint gas buying scheme looks good. The basic idea is simple enough, as detailed in this paper by the media’s favourite energy think-tank, Bruegel. In essence, gas distribution companies and large gas consumers in member states would submit their demand numbers for next season to Brussels and Brussels will hire what the European Council calls “a service provider” to find the total quantities on the global gas market.

In other words, the European Union will hire a procurer for its 27 members’ gas needs based on calculations by national gas distributors and large gas consumers in each of these members. Based on 2021 total EU gas imports, we’re talking about more than 300 billion cu m annually to be procured on the global gas market, meaning mostly the LNG market.