Faced with the risk of disruption of Russian gas supplies, Germany will do everything to avoid a “Lehman Brothers” energy in Europe, assured the government, Thursday, June 30. The day before, this disaster scenario was seriously mentioned, when the energy group Uniper, Germany’s largest gas importer, called on the State for help, faced with supply difficulties and rising prices. It is the first importer to take the plunge, it could be followed by others. The risk is to see the entire German energy sector being affected by a domino effect, which would spread to all market players, plunging the country into recession.
“Since June 14, Uniper has received from Gazprom only 40% of the gas volumes that had been negotiated by contract”, said Tiina Tuomela, the financial director of the German company, which is a subsidiary of the Finnish Fortum. The group must buy the missing quantities on the market, at a very high price, in order to be able to continue to supply its customers. Since it cannot immediately pass on the increase in purchase prices to the invoices, Uniper risks quickly finding itself in a situation of insolvency. On Wednesday evening June 29, the group warned of a drastic drop in its expected results and earnings. Its course collapsed by 20% during the day on Thursday.
The situation could get even worse: on July 11, gas deliveries must be cut for ten days, due to annual maintenance work on the Nord Stream 1 pipeline
Asked at a press conference on the sidelines of the North Atlantic Treaty Organization (NATO) summit in Madrid, Chancellor Olaf Scholz assured that his government was ready to “to do what is necessary” to help businesses going through difficulties due to external shocks. More concretely, the Minister of the Economy, Robert Habeck, mentioned the possibility of a participation of the State in the company, if the situation required it.
Losses of several hundred million euros per month
According to some analysts, Uniper could be losing several hundred million euros per month. However, the group plays an important role in the energy system, thanks to its reservoirs which allow the storage of gas for the winter and contribute to efforts to reduce the country’s dependence on Russian imports.
The situation could get even worse in the coming days: on July 11, gas deliveries are to be cut off for ten days, due to normal annual maintenance work on the Nord Stream 1 pipeline. In Berlin, there are great concerns that this technical break turns into “Complete blockage of Nord Stream 1”according to Mr. Habeck.
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