Germany nationalizes largest gas importer Uniper

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BERLIN — The German government said on Wednesday it has approved the nationalization of the country’s largest gas-importing company, Uniper, by expanding state intervention in the industry to avoid an energy shortage caused by Russia’s war in Ukraine.

The deal with Uniper builds on a bailout package agreed in July and includes an EUR 8 billion (dollar) capital increase that the government will fund. As part of the agreement, the government will acquire a 99% stake in Uniper, which was previously owned by Finnish Fortum. The Finnish government has the largest interest in Fortum.

German Economy Minister Robert Habeck said the deal was necessary because of Uniper’s importance in the German gas market. It has yet to be approved by the European Commission.

Uniper supplies about 40% of all gas customers in Germany and bought about half of its gas from Russia before the war.

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The company’s losses rose as Russia cut natural gas supplies to European countries that support Ukraine. Prices for the fuel needed to heat homes, generate electricity and power plants have skyrocketed, raising fears of business closures, rationing and a recession when the weather turns cold.

European countries have made efforts to counter the price spiral and have given priority to securing their energy supplies for the winter, including by filling their natural gas storage. Just last week, Germany also took control of three Russian-owned oil refineries before an embargo on Russian oil goes into effect next year.

Habeck noted that Germany has managed to fill its gas storage facilities to more than 90% in preparation for the winter heating season, despite Russia halting gas deliveries through the Nord Stream 1 pipeline. Wholesale gas prices have nearly halved since the summer, he said.

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“This means that as a whole we handled the situation quite well,” Habeck said. “But for Uniper, the situation is getting significantly more dramatic and significantly worse.”

Citing Uniper’s importance to the German gas market, Habeck said the government had chosen to nationalize the company “to ensure Germany’s security of supply”.

Chancellor Olaf Scholz has insisted that Germany is well positioned to get through the winter with sufficient energy, pointing to, among other things, new terminals for liquefied natural gas that are expected to open in the coming months.

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In a separate move last Friday, his government announced that German authorities would take control of three Russian refineries to ensure energy security. Two subsidiaries of Russian oil giant Rosneft are placed under the administration of Mueller’s Federal Network Agency.

Rosneft accounts for about 12% of Germany’s oil refining capacity and imports oil worth several hundred million euros (dollars) each month, according to the government, which said the trustship would initially last six months.

The network regulator was put in charge of Gazprom’s former German subsidiary in April, a decision the government says was necessary to “put order in the business” at the company after its Kremlin-controlled parent company abruptly cut ties with the unit. broken.

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