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Thursday, August 18, 2022

#Russia Cuts Gas Supply To German Energy Giant Uniper Even Further

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The biggest importer of Russian gas in Germany, energy giant Uniper, saw gas supply from Russia further cut to just a third of nominated and contractually agreed volumes, a spokesperson for the German firm told Reuters on Tuesday.

Russia is further reducing flows via Nord Stream this week, to just 20% of the pipeline’s capacity, days after restarting the link at 40% capacity after regular maintenance. The Russian explanation for the lower gas flows to Europe is that another turbine at a compressor station is up for maintenance and repairs, while the one that Canada returned from repairs has yet to be installed.

On Monday, Kremlin spokesman Dmitry Peskov said that the turbine Siemens returned would be installed once all formalities are completed, but noted, “We know that we have issues with other turbines, too, and Siemens is well aware of this.”

Meanwhile, Russia’s single largest gas buyer in Germany, Uniper, continues to struggle to get the contracted supply from Gazprom, days after the German government intervened to rescue the energy group, which has been reeling from reduced Russian supply and soaring prices of non-Russian gas.

Germany and Uniper agreed on Friday on a $15 billion bailout package, including the German government taking a 30-percent stake in the company, Germany making available further capital of up to $7.8 billion (7.7 billion euro) against the issuance of mandatory convertible instruments, and German state-owned KfW bank providing Uniper with an additional $7.1 billion (7 billion euro) in liquidity support through an increase of its existing credit facility.

German companies are also feeling the pinch from low gas supply from Russia and sky-high energy prices this year.

One of every six German industrial companies feels forced to reduce production due to high energy prices, a survey by the Association of German Chambers of Industry and Commerce, DIHK, showed earlier this week. The survey also showed that only half of Germany’s industrial companies have covered their annual 2022 gas requirements via contracts. More than a third of industrial firms still have to buy more than 30% of their annual gas needs.

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