First International Tender for European Gas Launched

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Europe is launching an international tender for the joint purchase of gas for the first time. It concerns 77 companies from the EU and other European countries that want to buy gas for a total volume of 11.625 billion cubic meters (bcm).

 

Of this, 2,781 bcm is in the form of liquefied gas (LNG).

International gas suppliers, except Russia, are invited to bid for this tender before May 15. The first round of tenders covers gas supplies from June 2023 to May 2024, the European Commission said. The so-called AggregateEU mechanism is open to all 27 EU countries plus energy companies in Albania, Bosnia-Herzegovina, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Serbia and Ukraine.

As with the joint procurement of corona vaccines, the EU can use its collective market power to negotiate better prices from international suppliers by bundling gas needs. But now, the commission is not involved in negotiating the contractual terms for the purchase and supply of the gas. Instead, the participating companies will negotiate with the bidders themselves. A number have agreed to act as central buyers or agents on behalf of other companies.

The joint purchase was prompted by the sky-high gas prices last year. Because the EU wants to say goodbye to its main gas supplier, Russia, it is diligently looking for affordable alternatives.

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