German Energy Giant Warns Of Insolvency “Within Days”, Starts Draining Gas From Storage
Dear Biden administration: for an example of a real emergency that justifies draining a commodity reserve – and not just midterm elections which Democrats will lose in a historic rout – read on.
German energy giant and distressed nat gas utility Uniper, which is among the companies most exposed to Russian natural gas, has started using gas it was storing for the winter after Russia cut deliveries to Europe, increasing pressure on Berlin as the German energy giant needs to be rescued “in a few days.”
The country’s top buyer of Russian gas started withdrawing fuel from storage sites to supply its customers, the company said in a statement to Bloomberg on Friday. The drawdowns, which began on Monday, will also help the company to save some cash as it has been forced to pay up for gas in the spot market. Meanwhile, flows through the Nord Stream 1 pipeline remain shut for maintenance.
Harald Seegatz, deputy chairman of the supervisory board, said that Uniper needs urgent help, risking insolvency within days.
“We are currently reducing our own gas volumes in our storage facilities in order to supply our customers with gas and to secure Uniper’s liquidity,” the company said. And judging by the flatlining of German gas storage in inventory, Uniper is not alone in draining reserves.
According to Bloomberg, citing data from Gas Infrastructure Europe, Uniper’s storage sites in Germany are now about 58% full, down from about 60% reached on Sunday. Drawdowns were also made from the company’s storage in Austria, but overall storage levels in Germany’s Alpine neighbor are still showing marginal increases.
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