Germany’s Uniper has been forced to withdraw gas from its storage facilities after deliveries from Russia’s Gazprom came to a halt, imperilling the country’s efforts to build up emergency supplies in advance of the winter.
The Dusseldorf-based company, which is Europe’s largest buyer of Russian gas, confirmed on Friday that it had been siphoning gas from storage units since the beginning of the week in order to fulfil contractual obligations to its commercial customers in the face of severely restricted supplies.
Germany, which was already receiving just 40 per cent of the gas ordered from Russia, has not been receiving any via the Nord Stream 1 pipeline since maintenance work began at the start of the week.
The country’s Federal Network Agency, which is in charge of monitoring gas supplies, confirmed that, as a result, more gas was being removed from storage than was being put in. It said: “[T]his development makes it harder to reach the storage levels necessary for the winter and reduces the reserves available in the event of a gas deficit situation.”
Germany’s plan remains to fill gas storage facilities to 90 per cent by the beginning of November in order to cushion the blow to industries and households in the event of a permanent cut in Russian supplies.
However, with just 3½ months remaining, the current storage level is only at 64.5 per cent. Companies, municipalities and private individuals have been urged to take measures to reduce their energy consumption so that more gas can be stored in the coming weeks.
Acute shortages in Germany could also hit neighbouring countries Denmark, France, Austria, Switzerland and the Czech Republic, all of which are net importers of gas that transits through Europe’s largest economy.
The withdrawal of gas from storage units comes amid negotiations over a rescue package for Uniper, which is losing tens of millions of euro a day as it is forced to procure gas from spot markets at highly inflated prices, without being able to pass on the increased costs to customers.
German ministers are in talks with their Finnish counterparts over the precise structure of a bailout for Uniper, which is majority owned by Finland’s Fortum, a partially nationalised group that has baulked at offering further support.
The German government has changed the law to allow for increased costs to be offset via a number of measures, including a one-off levy on consumers, but has not yet activated these provisions, or indicated how they would function. – Copyright The Financial Times Limited 2022
