• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient

Germany’s Top Buyer Of Russian Gas On The Brink Of Insolvency

Germany’s Uniper SE is just “days” away from insolvency, deputy chairman of Uniper’s supervisory board, Harold Seegatz, told Bloomberg on Friday.

Uniper is Germany’s largest purchaser of Russian natural gas, securing contracts with Gazprom. But as Gazprom cut flows of natural gas to Germany and Russia’s Nord Stream 1 pipeline undergoes maintenance, Uniper’s purchases of gas on the spot market have increased—a costlier scenario than its arrangement with Gazprom.

The high costs are creating an untenable situation for Uniper, and it is taken to withdrawing gas from storage—gas that was destined to help Germany make it through the coming winter as the country tries to wean itself off of Russian natural gas. Withdrawing gas from storage helps Uniper save on natural gas purchases, but this is merely a game of kicking the can into an inevitable insolvency oblivion.

“We are currently reducing our own gas volumes in our storage facilities in order to supply our customers with gas and to secure Uniper’s liquidity,” Uniper said, adding that it was clear “that Uniper cannot wait weeks, but needs help in a few days.”

Related: The EU Has Frozen $13 Billion In Russian Assets

Uniper is already negotiating with the German government a possible bailout that could give Germany a stake in the utility.

Uniper’s CEO Klaus-Dieter Maubach warned last Friday that the utility was unable to continue to refill storage ahead of winter, and could ultimately be forced to raise prices and even reduce supply.

Germany has a plan to fill its gas storage by 90% ahead of the winter season, with a deadline to achieve this set for November. But early withdrawals during summer—a relatively tame demand season for natural gas—this plan is now in serious jeopardy, and Germany could stare down winter heating season with precious little inventory.

By Julianne Geiger for Oilprice.com


More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Aaron Garner on July 15 2022 said:
    This doesn't really make sense. Gas companies operate off of margins. If spot goes up causing you to pay more then charge more. When propane jumped from around 1.00 spot to over 1.50 this past winter I adjusted my prices and passed the increases on to my customers. It's hard for me to believe that one of germanys largest NG suppliers doesn't know to pass the increase on to the customers. It's also baffling that a bank wouldn't grant them a loan if needed. Im sure they can provide the bank with adequate documentation showing that once winter hits they can repay them

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News