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.
Uniper’s deal builds upon a July rescue package and includes a capital rise of 8 billion euro that the government will fund. Uniper had been owned until recently by Fortum in Finland. The government now has a 99% interest. Fortum’s largest shareholder is the Finnish government.
Germany’s economy minister, Robert Habeck, said the deal was necessary because of the significance that Uniper plays in the German gas market. It needs to be approved the European Commission.
Uniper provides about 40% of Germany’s total gas demand, while Russia was the source of about half its supply before WW2.
The company’s losses mounted as Russia has cut back natural gas supplies to European countries supporting Ukraine. The fuel used to heat houses, produce electricity, and run factories has seen prices rise, raising concerns about business closings and the possibility of rationing.
Continue reading: Europe depends on Russian Gas. The Fears of a Cut-Off and a Tough Winter Ahead
European nations have been trying to stem the spiraling price of oil and prioritized winter security, which includes filling up their natural gas reserves. Germany has also taken control of three Russian owned oil refineries, just weeks before an embargo against Russian oil becomes effective next year.
Habeck observed that Germany managed to reach over 90% of its gas storage capacities in preparation to the winter heating season despite Russia’s halt to gas delivery through the Nord Stream 1 pipeline. According to Habeck, wholesale prices of gas have fallen almost half since summer.
“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.”
Olaf Scholz from the German Chancellor has insisted Germany is well placed to make it through winter energy-wise, and he pointed to the new liquefied natural gaz terminals that are expected to be operational in the following months.
Separately, the German government declared last Friday that it was taking over three Russian-owned refineries from Russian authorities to secure 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 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.
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