Germany close to deal on nationalizing gas firm Uniper
Associated Press September 20, 2022
BERLIN — German natural gas importer Uniper said Tuesday that it's in "final discussions" with the government on an agreement for Berlin to take a majority stake — ramping up a July rescue deal as its losses mount following cutbacks in supplies of Russian gas.
Uniper said the amended bailout package would feature a capital increase to the tune of 8 billion euros (dollars), which the government would finance. The German government also would acquire the majority stake now held by Finland-based Fortum. The Finnish government holds the largest stake in Fortum.
"As a result, it is envisaged that the Federal Government will obtain a significant majority stake in Uniper," said the company, which had confirmed talks on a possible nationalization last week. It added that "the final agreement has not yet been concluded."
The German government put together the initial rescue package, which foresaw it taking a roughly 30% stake, after Russia's cuts to natural gas supplies forced Uniper to buy gas at far higher prices on the market to fulfill its supply contracts.
The Uniper rescue is one of several measures taken by the government to try to ensure sufficient energy supplies this winter. Others include filling natural gas storage facilities.
They are now more than 90% full in preparation for the winter heating season and rising steadily despite the Russian cutoffs of the Nord Stream 1 pipeline.
The head of the national network regulator, Klaus Mueller, tweeted late Monday that gas storage had "achieved another milestone" and that the stored gas will help in managing any potential gas emergencies and will flow back into the market.
He cautioned that "nevertheless, we must continue to save gas." The fuel heats homes, powers factories and generates electricity.
The government tightened storage requirements in July after Russia's state-owned Gazprom started reducing supplies, which has contributed to soaring gas prices.
Germany introduced a requirement for storage to be 75% full by Sept. 1 and raised the targets for October and November to 85% and 95%, respectively, from 80% and 90%. The November target is roughly equal to the amount of gas that Germany used in January and February this year, when temperatures were relatively mild.
Russia hasn't delivered any gas through Nord Stream 1 since the end of August as tensions mount over the war in Ukraine. The country started reducing gas supplies through the pipeline in mid-June, citing alleged technical problems. German officials dismissed that explanation as cover for a political decision to push up prices and create uncertainty.
Before the reductions started, Russia accounted for a bit more than a third of Germany's gas supplies.
Chancellor Olaf Scholz says 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.