BERLIN, May 9 (Reuters) – German authorities are quietly preparing for any sudden shutdown of Russian gas supplies with an emergency package, which could include taking control of critical companies, three people familiar with the matter told Reuters.
The preparation, led by the Ministry of Economy, shows increased readiness to supply gas, which feeds Europe’s largest economy and is critical to the production of steel, plastics and cars.
Russian gas accounted for 55 percent of Germany’s imports last year, and Berlin is under pressure to ruin business relations that critics say help finance Russia’s war in Ukraine.
Register now for FREE unlimited access to Reuters.com
I’m registering
Germany has said it wants to give up Russian supplies, but expects to rely heavily on Moscow for gas by mid-2024.
It remains unclear whether a sharp halt will occur, and officials said Germany wants to prevent an escalation, such as by backing the European gas embargo, after already backing sanctions on Moscow over coal and oil.
But now they fear that Russia could cut off gas supplies unilaterally, and they want to be able to cope if they do.
Although there is a broad framework and the government is determined to help, details on how it will implement the plan are now being broken, officials said.
The government will support additional loans and guarantees to support energy companies by helping them cope with rising prices and could take critical companies, such as refineries, under its wing, the three officials said.
Asked to comment on the measures, the German Ministry of Economy cited statements by its leader, Vice Chancellor Robert Habeck, that the country has made “intensive efforts” in recent weeks to reduce the use of Russian energy.
Last month, Berlin approved a legal change that would allow it to take control of energy companies as a last resort.
It is now being discussed how it could use the measure in practice, such as taking control of the PCK refinery run by Russia’s Rosneft (ROSN.MM) in Sweden near Poland, two people said. It accounts for most of Russia’s remaining oil in Germany and could be affected by the European Union’s oil embargo.
Rosneft declined to comment on possible German actions.
ENERGY NATIONALIZATION?
One person said that the nationalization of energy companies is an option that is being considered, but will have to be carefully considered and justified on the grounds of securing energy supplies, not punishing Russia.
Germany may take stakes in other companies, two acquaintances said. In 2018, it made a similar move when the state-owned development bank KfW bought 20% of the network operator 50Hertz to reject an offer from the Chinese state network.
The final government emergency package has not yet been finalized. One person warned that the acquisition of minority stakes in companies and the intervention in the Swedish refinery remained under discussion, but no decision was made.
Officials are also exploring how KfW can ease the pressure on critical companies by backing them up with additional loans or emergency credit lines that they could use if energy prices soar and provoke costly margin demands in their market positions.
Earlier this year, KfW helped German energy company Uniper (UN01.DE), EnBW’s gas division (EBKG.DE) VNG and power plant operator Leag deal with volatile energy markets.
KfW declined to comment on which companies it has helped.
Germany is also exploring how to supply gas in emergencies. Its regulator is considering giving the industry priority over households, which would be a reversal of the current policy of cutting off business first.
Discussions are taking place against the backdrop of the war in Ukraine and growing tensions between Moscow and Brussels, which have backed tough sanctions to isolate Russia.
Russian President Vladimir Putin told his armed forces in a parade on Monday that they were fighting for their country, but offered no clue as to how long their attack on Ukraine, which the Kremlin calls a special military operation, would continue.
ECONOMIC SPIRAL
Russia’s Gazprom (GAZP.MM) halted gas exports to Poland and Bulgaria last month after they refused to pay in rubles, but the Kremlin has dismissed the European Commission’s allegations that Moscow is using natural gas supplies as blackmail.
The Kremlin and Gazprom have repeatedly said that Russia is a reliable energy supplier.
The Kremlin and Gazprom did not immediately respond to a request for comment on the reliability of supplies.
After hesitantly backing sanctions on coal and oil, Berlin also wants to draw the line, four officials said.
They are concerned that restricting gas could also lead to a sharp rise in prices, allowing Moscow to profit from sales outside the EU and thus still failing to drain its military box.
Officials said Germany was reaching the limit of sanctions it could impose without triggering an economic spiral, with even those in the ruling coalition sincerely behind Moscow’s sanctions, which are wary of imposing sanctions on gas.
Berlin has also been influenced by captains of German industry, including CEOs of its largest listed companies and representatives of companies with ties to Russia, who meet regularly and lobby public officials not to ban gas, said a source familiar with the matter. the question.
The company’s executives told Berlin they were preparing to re-establish energy ties with Russia in any case, but urged the government not to force them to do so immediately, said a second person familiar with the discussions.
Register now for FREE unlimited access to Reuters.com
I’m registering
Additional reports by Christoph Steitz in Frankfurt; Edited by David Clark
Our standards: Thomson Reuters’ principles of trust.
Add Comment