Russian supplies of liquefied natural gas (LNG) may continue to be shipped to German terminals despite the European Union’s drastic shift in energy policy towards Russia, according to Michael Lewis, the CEO of Uniper, which is one of the major utility companies in the EU nation. Lewis highlighted that Russia is still selling LNG to the global market, and wholesalers like Uniper are unable to track the origin of the purchased gas.
Uniper had ceased purchasing gas from Russia at the end of August 2022 following the introduction of EU sanctions against Russia due to the military operation in Ukraine. As a result, the company experienced a record loss of €19.1 billion ($20.3 billion) in 2022, with the halt in Russian gas supply being a significant contributing factor.
Despite this, Lewis stated that Germany is better prepared for the upcoming winter compared to the previous year, as the country’s gas storage facilities are 95% full. However, he also warned of potential risks, particularly if there are extremely cold temperatures or issues with LNG purchases. Lewis expressed concerns that if China’s economy grows and there is an increased demand for LNG, Europe may face a shortage of fuel, leading to price spikes.
Lewis emphasized that concerns surrounding sufficient gas supplies persist, and even minor disruptions could lead to a surge in energy prices. However, he does not anticipate prices reaching the same levels as the previous season.
The German Ministry of the Economy acknowledged that Berlin supports the cessation of Russian LNG supplies to Germany. However, the ministry also admitted that it would be challenging for importers in the country to abstain from Russian deliveries since it is impossible to trace the origin of the gas.
In conclusion, Russian supplies of LNG may still reach German terminals despite the EU’s energy policy shift towards Russia. Uniper and other wholesalers are unable to track the origin of the purchased gas. Germany is in a better position for the upcoming winter due to high gas storage levels, but potential risks remain. Concerns over gas supplies persist, and even minor disruptions could result in energy price surges. The German Ministry of the Economy supports the halt of Russian LNG supplies but acknowledges the difficulty in abstaining from Russian deliveries due to the lack of traceability.