Energy crisis: Germany nationalizes the largest gas company to ensure continued supplies

6 hours ago

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picture released, Reuters

Germany plans to nationalize gas giant Uniper in a bid to secure energy supplies amid the war in Ukraine.

The deal will see the German government acquire a 98.5 percent stake in the company at a cost of €8.5 billion (£7.4 billion).

Germany is Europe’s largest importer of Russian gas and has come under great pressure after Russia cut supplies in recent months.

The company’s chief executive, Klaus-Dieter Maubach, said the deal would help Uniper fulfill its role as an “important energy supplier to the system”.

Before the Russian invasion of Ukraine, Russia supplied Europe with about 40 percent of its natural gas needs, but it responded to Western sanctions imposed on it by gradually cutting supplies.

At the beginning of this month, Moscow halted supplies via the Nord Stream 1 pipeline, claiming it needed repairs – but later said supplies would only be resumed when sanctions were lifted.

Uniper is Germany’s largest buyer of Russian gas. In recent months, it has had to replace Russian supplies with alternatives from the open market, at a time when prices have skyrocketed.

The Finnish company, Fortum, which owns Uniper, said the company had incurred gas-related losses of nearly 8.5 billion euros (£7.4 billion) and “cannot continue to fulfill its role as an important provider of security of supply as a privately owned company”.

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“The role of gas in Europe has fundamentally changed since Russia attacked Ukraine,” Marcos Raoromo, CEO of Fortum, said in a statement.

“As a result, the feasibility study for an integrated package is no longer viable,” he added.

Under the terms of the deal, the German government will buy Fortum’s shares in Uniper for €500m (£437m) and inject €8bn (£7bn) in cash into the company.

The government had already acquired a 30 percent stake in Uniper as part of a rescue plan for the company last July.

Earlier this month, the government also entered into discussions with another major gas supplier, VNG, for a possible rescue package.

Economy Minister Robert Habeck described the nationalization of Uniper as a “necessary” step that would “help ensure the security of supplies for Germany”.

He also said that despite the Russian supply disruption, Germany had succeeded in filling its gas storage facilities to more than 90 percent of capacity before winter arrived.

“This means that we, all of us, have coped well with the situation. But for Uniper, the situation has become much more dramatic and much worse.”

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At the beginning of September, Germany introduced a series of measures aimed at reducing energy use and avoiding shortages over the coming months.

Businesses are no longer allowed to keep their doors open all day to reduce the need for heating, and illuminated advertisements must be turned off after 10pm.

Heating will not work in the halls and corridors of most public buildings, and offices can be heated to a maximum of 19 degrees Celsius.

In July, energy ministers across Europe also agreed to cut their natural gas consumption by 15 percent.

The article is in Arabic

Tags: Energy crisis Germany nationalizes largest gas company ensure continued supplies

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