Germany raises gas alert level after Russia cuts supply

FRANKFURT: Germany moved closer to rationing natural gas on Thursday (Jun 23) as it raised the alert level under an emergency plan after Russia slashed supplies to the country.

“Gas is now a scarce commodity in Germany,” Economy Minister Robert Habeck told reporters at a press conference.

Russia was using gas “as a weapon” against Germany in retaliation for the West’s support for Ukraine following Moscow’s invasion, Habeck said, with the aim of “destroying” European unity.

But the Kremlin dismissed Germany’s suggestion there were political motives behind the limits to supply as “strange”.

Germany, like a number of other European countries, is highly reliant on Russian energy imports to meet its needs.

Triggering the “alarm” level – the second of three steps under the emergency plan – brings Germany a step closer to the final stage that could see gas rationing in Europe’s top economy.

The increased level reflected a “significant deterioration of the gas supply situation”, Habeck said.

“If we do nothing now, things will get worse,” Habeck said.

RUSSIAN REBUTTAL

Russian energy giant Gazprom cut supplies to Germany via the Nord Stream pipeline by 60 per cent last week, blaming the new limits on delayed repairs.

Germany has dismissed the technical justification provided by Gazprom, instead calling the move a “political decision”.

Kremlin spokesman Dmitry Peskov said on Thursday there was “no double meaning” in the supply decision.

“Our German partners are well aware of the technological servicing cycles of a pipeline,” he said.

“It’s strange to call it politics.”

In recent weeks, Gazprom has stopped deliveries to a number of European countries, including Poland, Bulgaria, Finland and the Netherlands.

Supplies of gas to Europe’s largest economy were “secure”, Habeck said, but action was still required to prepare for the winter ahead.

To mitigate the risks from a supply cut, the government mandated gas storage facilities be filled to 90 per cent by the beginning of December.

Currently, the country’s stores stand just under 60 per cent full, above the average level of previous years.

In France, the government said Thursday it aimed to fill its natural gas reserves by autumn as it too braces for a drop in supply from Russia.

France will also build a new floating terminal to receive more liquefied natural gas (LNG) supplies by ship, Prime Minister Elisabeth Borne announced.

The terminal is to be positioned off Le Havre on France’s northern coast.

“We can do without Russian gas,” French Energy Transition Minister Agnes Pannier-Runacher said later on BFM Business TV.

“This assumes that the LNG tankers arrive on time and that we can comfortably fill our strategic storage,” she added.

The European Bank for Reconstruction and Development (EBRD) meanwhile said it would lend 300 million euros to Moldova to for gas purchases.

SUPPLY STOPPAGE

The German government expects supply to stop between Jul 11 and Jul 25 for annual maintenance on the Nord Stream pipeline.

If deliveries do not resume after the service period, Germany could face a shortage of gas as soon as “mid-December”.

Since the outbreak of the war in Ukraine, Germany has managed to reduce the share of its natural gas supplied by Russia from 55 per cent to around 35 per cent.

The government has found new sources of supply, accelerated plans to import gas in the form of LNG by sea, and put aside €15 billion (US$15.8 billion) to buy gas to fill storage facilities.

Germany also decided to reactivate mothballed coal-fired power plants to take the burden for electricity generation off gas.

In contrast, the government shrugged off calls to extend the operational lifetime of its nuclear power plants.

Prolonging the use of the final reactors set to be taken off the grid at the end of the year was “not an option”, it said Wednesday.

Germany had to look to see what “energy saving potential” existed, Habeck said Thursday.

Households could “make a difference” by conserving energy, after Germany launched a campaign to encourage fuel-saving measures, he said, while industry could also make a further contribution.