Connect with us

Energy

Germany nationalizes country’s biggest gas importer Uniper

Published

4 minute read

By Frank Jordans in Berlin

BERLIN (AP) — The German government said Wednesday that it has agreed to nationalize the country’s biggest gas importing company, Uniper, expanding state intervention in the industry to prevent an energy shortage resulting from Russia’s war in Ukraine.

The deal with Uniper builds on a rescue package agreed in Julyand features a capital increase of 8 billion euros (dollars) that the government will finance. As part of the agreement, the government will gain a 99% stake in Uniper, which until now was controlled by Finland-based Fortum. The Finnish government has the largest stake in Fortum.

Germany’s economy minister, Robert Habeck, said the deal was necessary because of the significance that Uniper plays in the German gas market. It still needs to be approved by the European Commission.

Uniper supplies about 40% of all gas customers in Germany and before the war it bought about half of its gas from Russia.

The company’s losses mounted as Russia has cut back natural gas supplies to European countries supporting Ukraine. Prices have soared for the fuel needed to heat homes, generate electricity and power factories, raising fears of business closures, rationing and a recession as the weather turns cold.

European countries have scrambled to counter the price spiral and prioritized securing their energy supplies for winter, including by filling their natural gas storage. Just last week, Germany also moved to take control of three Russian-owned oil refineries before an embargo on Russian oil takes effect next year.

Habeck noted that Germany has managed to fill its gas storage facilities to over 90% capacity in preparation for the winter heating season despite Russia halting gas deliveries through the Nord Stream 1 pipeline. Wholesale prices for gas have almost halved since the summer, he said.

“This means that, as a whole, we have coped quite well with the situation,” said Habeck. “But for Uniper the situation become significantly more dramatic and significantly worse.”

Citing the importance of Uniper for the German gas market, Habeck said the government had chosen to nationalize the company “in order to ensure security of supply for Germany.”

Chancellor Olaf Scholz has insisted that Germany is well-placed to get through the winter with enough energy, pointing to new liquefied natural gas terminals expected to start work in the coming months, among other things.

In a separate move last Friday, his government announced that German authorities were taking control of three Russian-owned refineries to ensure energy security. Two subsidiaries of Russian oil giant Rosneft are being put under the administration of Mueller’s Federal Network Agency.

Rosneft accounts for about 12% of Germany’s oil refining capacity, importing oil worth several hundred million euros (dollars) every month, according to the government, which said the trusteeship was initially due to last for six months.

The network regulator already was put in charge of Gazprom’s former German subsidiary in April, a decision that the government said was necessary to bring “order to the conditions” at the company after the Kremlin-controlled parent company abruptly cut ties with the unit.

Storytelling is in our DNA. We provide credible, compelling multimedia storytelling and services in English and French to help captivate your digital, broadcast and print audiences. As Canada’s national news agency for 100 years, we give Canadians an unbiased news source, driven by truth, accuracy and timeliness.

Follow Author

Energy

Europe faces ‘unprecedented risk’ of gas shortage, IEA says

Published on

By David Mchugh

Europe faces “unprecedented risks” to its natural gas supplies this winter after Russia cut off most pipeline shipments and could wind up competing with Asia for already scarce and expensive liquid gas that comes by ship, the International Energy Agency said.

The Paris-based IEA said in its quarterly gas report released Monday that European Union countries would need to reduce use by 13% over the winter in case of a complete Russian cutoff amid the war in Ukraine. Much of that cutback would have to come from consumer behavior such as turning down thermostats by 1 degree and adjusting boiler temperatures as well as industrial and utility conservation, the group said.

The EU on Friday agreed to mandate a reduction in electricity consumption by at least 5% during peak price hours.

Just a trickle of Russian gas is still arriving in pipelines through Ukraine to Slovakia and across the Black Sea through Turkey to Bulgaria. Two other routes, under the Baltic Sea to Germany and through Belarus and Poland, have shut down.

Another hazard in the study was a late winter cold snap, which would be particularly challenging because underground gas reserves flow more slowly at the end of the season due to less gas and lower pressure in the storage caverns. The EU has already filled storage to 88%, ahead of its goal of 80% before winter. The IEA assumed 90% would be needed in its Russian cutoff scenario.

Businesses in Europe have already cut back natural gas use, sometimes simply by abandoning energy-intensive activity such as making steel and fertilizer, while smaller businesses like bakeries are feeling a severe crimp in their costs.

High prices for gas, which is used for heating homes, generating electricity and a host of industrial processes are feeding through to record consumer inflation of 10% in the 19 EU member countries that use the euro and sapping so much consumer purchasing power that economists predict a recession at the end of this year and the beginning of next.

European governments and utilities have made up much of the Russian shortfall by purchasing expensive supplies of liquefied natural gas, or LNG, that comes by ship from countries such as the U.S. and Qatar and by obtaining increased pipeline supply from Norway and Azerbaijan.

The goal is to prevent storage levels from falling so far that governments must ration gas to businesses. Gas storage must remain above 33% for a secure winter, according to the IEA, while levels below that risk shortages if there’s a late cold snap.

Lower levels also would make it harder for Europe to refill storage next summer, while higher reserves from conservation would help lower extremely high prices.

European leaders say the cutback in Russian gas is energy blackmail aimed at pressuring governments over their support for Ukraine and sanctions against Moscow.

Since Russia halted flows this month through the Nord Stream 1 pipeline running under the Baltic Sea to Germany, it and the parallel Nord Stream 2 — built but never operated after Germany refused to certify it — were damaged in underwater explosionsthat European governments say are sabotage.

Demand for liquefied gas has driven up prices and tightened supply to the extent that poorer countries in Asia cannot afford it. Bangladesh is experiencing widespread power blackouts, while Pakistan faces rolling blackouts and has introduced reduced working hours for shops and factories to save electricity.

“Interregional competition in LNG procurement may create further tension, as additional European needs would put more pressure on other buyers, especially in Asia, and conversely cold spells in Northeast Asia could limit Europe’s access to LNG,” the agency said.

The gas crisis in Europe has also deprived Asian countries of the limited number of floating regasification terminals, which were expected to play a major role in LNG imports in Southeast Asia. Europe has secured 12 of the vessels and plans another nine.

Continue Reading

Business

Vancouver gas prices pass $2.39, breaking North American record: analyst

Published on

Vancouver – Gas prices in Vancouver hit a new high of more than $2.39 a litre at some stations Thursday, blowing past the previous peak set this summer.

One gas analyst said that’s a new all-time record for North America, and expects prices to continue to rise this week.

Dan McTeague, president of Canadians for Affordable Energy, said prices passed the previous record of nearly $2.37 a litre, set in Vancouver in June, due to the temporary shutdown of refineries in the U.S. Pacific Northwest and California.

McTeague said prices will likely rise again then drop fairly quickly once the supply issues are resolved.

“I don’t see the all-clear light at the end of the tunnel just yet. It’s going to happen and when it does it will be a dramatic drop, probably about 20 cents a litre, not in one fell swoop but very close to that over two or three days,” he said.

Gas prices jumped overnight across Canada by almost 20 cents in some places.

McTeague said no one could have predicted gas prices increasing at the speed they have over the past several days.

“The bottom line is that there’s not enough supply out there and however we got here, we’re going to have to spend a bit more time trying to figure this out because this is the kind of things that bring economies to a standstill,” he said.

According to the CAA’s price tracker, gas is up nationally by just over three cents on average at $1.58 per litre, with some provinces seeing higher jumps than others.

The CAA says the average gas price across Vancouver was $2.32 on Thursday.

This report by The Canadian Press was first published Sept. 29, 2022.

Continue Reading

october, 2022

thu13oct5:30 pm7:30 pmPregnancy & Loss Support Group - Zoom Session5:30 pm - 7:30 pm

Trending

X