Germany Nationalizes its Biggest Natural Gas Supplier

Russian gas has had to be substituted with costly alternatives, leading to soaring bills for consumers.

SEATTLE (Oil Monster):  Germany is nationalizing Uniper, its biggest importer of natural gas, as part of an €8 billion ($7.9 billion) plan to prevent an energy shortage this winter.

Europe has been hit by soaring natural gas and electricity prices as a result of Russia's invasion of Ukraine and its throttling of gas supplies.

The German government will hold around 99% of Uniper and 8% of its Finnish parent company Fortum (FOJCF), German Economy Minister Robert Habeck told journalists in Berlin on Wednesday.

Uniper provides 40% of the country's gas supply and is crucial for large companies and private consumers in Europe's biggest economy.

In July, Chancellor Olaf Scholz announced the government would step in to bail out Uniper with a package worth up to €15 billion ($15.3 billion), after it was brought to its knees by months of Russian supply cuts and soaring spot market prices.

Under the rescue deal, the government committed to provide €7.7 billion ($7.8 billion) to cover potential future losses, while state-run bank KfW agreed to increase its credit facility by €7 billion ($7.1 billion).

But Habeck said the situation had 'worsened dramatically' since Russia cut off gas supplies to Europe through the Nord Stream 1 pipeline indefinitely on September 1, citing an oil leak.

Russian gas has had to be substituted with costly alternatives, leading to soaring bills for consumers.

Although gas supplies through Nord Stream 1 are suspended, Germany's gas reserves are filled at more than 90% capacity, European Storage provider GIE AGSI+ said on its website.

Still, the European energy crisis isn't going away.

Habeck said that the country could 'get through winter well' without Russian gas, but warned of 'really empty' supply levels in the period thereafter.

 Courtesy: www.cnn.com