Germany prepares for possible Russian gas cut

Shiva Singh
Panevezys/Lithuania June 11, 2019 Gazprom oil barrel. Gazprom is a large Russian company founded in 1989, which carries on the business of extraction, production, transport, and sale of natural gas.

Belgium, (Brussels Morning Newspaper) Germany is preparing for a possible Russian gas cut, according to three sources familiar with preparations.

Sources noted that the Ministry for Economic Affairs and Climate Action is leading the preparations and added that the plan could include seizing control of key companies, according to Reuters reporting on Monday.

Last year, Russian natural gas accounted for roughly 55% of Germany’s imports and the country has come under pressure to impose an embargo on Russian gas after the war in Ukraine broke out.

Germany’s industry is dependent on gas imports to fuel production of plastics, steel and automobiles, among other. The country has announced plans to phase out Russian gas imports and predicted that it will overcome its dependency in mid-2024.

The German government noted that it does not want to escalate the situation by imposing an embargo on Russian gas and reminded that it supported EU sanctions targeting Russian oil and coal sectors.

According to sources, German officials believe Russia could stop delivering gas and are preparing a crisis plan to deal with a potential cut.

One source stressed that nationalisation of key Russian companies would only be justified for energy security purposes and not as a means to punish Moscow.

According to four officials, Germany does not want to support the proposed gas embargo as the move would further drive up prices, which would allow Russia to make more profit on non-EU markets.

Large German companies have lobbied against the planned gas embargo, according to a source familiar with the matter, calling on government officials to allow time for phasing out Russian imports.

Talks with Qatar

Germany’s negotiations with Qatar on liquefied natural gas (LNG) deliveries have hit an obstacle, according to three sources familiar with talks.

Sources noted that the two sides disagree on duration of contracts, Germany’s right to resell the gas in the EU and oil indexation, among other.

According to two sources familiar with the matter, German energy companies will return to Qatar to resume negotiations later this month.

The two sources added that Emir of Qatar Sheikh Tamim bin Hamad Al Thani is to make a return visit to Germany in the second half of the month to sign a partnership deal.

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Shiva is a professional digital marketer who covers the latest updates in the tech industry from across the globe. With an experience of over 5 years in the world of Information Technology, he likes to keep up with every major development and writes fact-based pieces backed by in-depth research.