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Uniper says it draws gas from storage

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Employees monitor gas leaks during a safety check at Uniper’s Bierwang natural gas storage facility.

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Germany’s energy giant Uniper said on Friday that Europe needs to emit gas from its storage facilities and reduce its winter supply, despite extreme heat waves.

A puzzled utility told CNBC that it needed to reduce the amount of gas from its storage facility “to supply gas to its customers and ensure the liquidity of Uniper.”

Finland’s majority owner, Fortum, said last week that Uniper had filed a bailout application with the German government after suffering extreme financial difficulties due to gas shortages and rising prices.

The German Ministry of Economy said on Friday that there was no time frame for government support yet, according to Reuters.

Uniper CEO Klaus Dieter Mobach told reporters at a press conference on July 8 that gas imports from Russia have “significantly declined”, reducing gas supplies from storage facilities. Warned that it might be possible.

Uniper CEO Klaus Dieter Mobach held a press conference on July 8, 2022 at the company’s headquarters in Dusseldorf, Germany, on a government relief plan.

Inafus Bender | Afp | Getty Images

It happens even when Europe is hot and humid in heat waves with temperatures above 40 degrees Celsius (104 degrees Fahrenheit) in some countries.

Droughts and wildfires have been recorded in Spain and Portugal, and the heat wave is widespread in the United Kingdom and France. Climate scientists have repeatedly shown that artificial global heating makes heat waves more prone and more intense.

As scorching temperatures spread throughout the region, European policymakers continue to focus on preparing for the return of cold weather.

During the winter, the government is struggling to fill underground storage with gas supplies to provide homes with enough fuel to turn on electricity and keep homes warm.

“Really tough” a few months away

Uniper was the first German energy company to warn of soaring energy bills following Russia’s onslaught in Ukraine. The company has received only 40% of Russia’s contracts in recent weeks, forcing it to procure replacement quantities at significantly higher prices.

In addition, the annual maintenance of the Nord Stream 1 pipeline, the European Union’s largest gas import infrastructure, raises the risk of further disruptions to gas supplies.

Russia stopped shipping via the NordStream1 pipeline on July 11th. Summer maintenance work will be carried out until July 21st.

Germany fears that for “political reasons” Russia could continue to curb Europe’s energy supply beyond the planned end of maintenance of the Nord Stream 1 pipeline.

The Kremlin previously dismissed allegations of using oil and gas to put political pressure on Europe.

Dan Yagin, Vice Chairman of S & P Global, emphasized that Russian President Vladimir Putin outlined Moscow’s energy strategy at the St. Petersburg International Economic Conference last month.

“Europe’s energy problems have led to social conflicts and the rise of populist parties in Russia’s favor has resulted in economic difficulties, and as he said, changes in the European elite,” Putin said. Said. ..

Putin’s purpose is to “break the alliance,” he told CNBC’s “capital relations” on Friday. “So … the next few months will be really tough. It will be a race to see if Europe can get enough gas to survive the winter, and Russia will. I think. Everything you can do to avoid getting there. “

Yergin said he expects Europe’s winter energy problems to “resonate around the world.”

— CNBC’s Annette Weisbach contributed to this report.