An employee monitors a gas leak during a security check at Uniper’s Beerwang natural gas storage facility.
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german energy giant Uniper On Friday it said it had to withdraw gas from storage facilities, reducing supplies needed for the winter, while Europe faces a scorching heat.
The embattled utility told CNBC in a statement that reducing the amount of gas from its own storage facilities was necessary “to supply gas to our customers and to secure Unipar’s liquidity.”
Finnish majority owner Fortum said last week that Unipero submitted a bailout application for the German government after running into extreme financial trouble due to gas shortages and rising prices.
Germany’s economy ministry said on Friday that there was still no deadline for government aid, according to Reuters.
Speaking to reporters at a news conference on July 8, Unipar CEO Claus-Dieter Maubach warned that gas supplies from its storage facilities were likely to be low due to an “extreme shortage” of gas imported from Russia.
Uniper CEO Claus-Dieter Maubach addresses a press conference about the government’s rescue plan at the company’s headquarters in Düsseldorf, Germany, on July 8, 2022.
Ina Fassbender | AFP | Getty Images
It also comes as a heat wave is sweeping Europe as temperatures exceed 40 °C (104 °F) in many countries.
Droughts and wildfires have been recorded in Spain and Portugal, and temperatures have spread to Britain and France. Climate scientists have clarified time and again that human-caused global warming is making heat waves more likely and more intense.
As scorching heat spreads across the region, European policy makers are focusing on preparations for the return of cold weather.
Governments are scrambling to fill underground storage with gas supplies to provide homes with enough fuel to light and keep homes warm during the winter.
A few months ahead ‘really tough’
Uniper was the first German energy company to sound the alarm over rising energy bills in the wake of Russia’s invasion of Ukraine. The company has received only 40% of the Russian contracted quantity in recent weeks and has been forced to obtain replacement quantities at significantly higher prices.
What’s more, annual maintenance on the Nord Stream 1 pipeline – the EU’s largest piece of gas import infrastructure – Has fueled fears of further disruption in gas supply,
Russia suspended deliveries via the Nord Stream 1 pipeline on 11 July. Summer maintenance works are scheduled to last till July 21.
Germany fears that Russia may continue to block Europe’s energy supply beyond the scheduled end of maintenance of the Nord Stream 1 pipeline.political reasons,
The Kremlin has previously dismissed claims that it is using oil and gas to exert political pressure on Europe.
S&P Global Vice Chairman Dan Yergin said Russian President Vladimir Putin Outlined Moscow’s energy strategy Last month at the St. Petersburg International Economic Conference.
Putin spoke of the economic hardship caused by “social conflict resulting from energy problems in Europe, leading to the rise of populist parties that would be more friendly to Russia. And, as he said, a change in the elite in Europe, Yergin said. ,
Putin aims to “break the alliance,” he told CNBC’s “Capital Connection” on Friday. “And so… the next few months are going to be really tough. It’s going to be a race to see if Europe can be in a position to have enough gas to get through the winter and that’s what Russia is going to do , I think, it will do everything it can to make sure it doesn’t get there.”
Yergin said he expects Europe’s winter energy problems to “resonate around the world.”
— CNBC’s Annette Weisbach contributed to this report.