Advertisement

Czechs plan new state energy trader to boost gas security

Steam billows from the cooling towers of the Temelin nuclear power plant near the South Bohemian town of Tyn nad Vltavou

PRAGUE (Reuters) - The Czech industry ministry plans to launch a new state energy trader whose main aim is purchasing gas as the central European country seeks to boost its energy security and shift away from dependence on Russian supplies.

The Czech Republic is nearly 100% dependent for its gas on Russia, which cut supplies to Bulgaria and Poland last month after they refused to pay for it in roubles as demanded, sparking concerns other European Union countries could be similarly hit.

Industry Minister Jozef Sikela told a news conference on Monday the new trader would concentrate on gas supplies at the start and it would make purchases to help cover the state's consumption.

"We are working on establishing a state energy trader, primarily, we want it to use for gas purchases, perhaps also for some other kinds of energy over time," he said.

"The state trader will be able to talk directly to foreign gas producers and buy from them at better prices," Sikela said.

Gas imports are currently made by private companies.

Sikela said gas storage levels in the country have reached over 40%, above levels of just below 30% at this time one year ago.

The state this month, for the first time, added gas to its state reserves as Russia's invasion of Ukraine prompted a re-think on energy security and a drive to cut dependence on Russian supplies. Utility bills for households and companies have also soared, worsened by the war which has caused energy and commoditiy prices to spike.

For its reserves, the state purchased 2.4 terawatt hours (TWh) of gas for 8.5 billion crowns ($365 million) from majority state-owned utility CEZ. The volume amounts to around 2% of the country's 2021 consumption.

Sikela said having a state trader would also increase the state's influence on gas storage in the country.

(Reporting by Jason Hovet and Robert Muller; Editing by Emelia Sithole-Matarise)