Germany should cut gas use in preparation for Russian cut-off -research

By Vera Eckert

FRANKFURT (Reuters) – Germany should already limit gas use, even though Russian supplies have so far continued, to prepare for the possibility of a future cut-off in retaliation for Western sanctions over Moscow’s invasion of Ukraine, energy research institute EWI said on Monday.

Russian energy giant Gazprom last Wednesday stopped gas supplies to Bulgaria and Poland after they declined to comply with a scheme proposed by Moscow requiring payments in roubles, raising concerns Germany could also be vulnerable.

“Gas demand should be reduced immediately over the summer months,” said Eren Cam, head of Energy Resources at Cologne-based EWI, recommending proactive measures to shore up supply security.

German utility Uniper, a major Russian gas customer whose next payment is due at the end of May, has said an EU embargo under consideration on Russian oil could prompt Russia to halt westward gas flows.

On Monday, EU energy ministers meet for emergency talks, which will include discussions of whether making payments to Russia via a mechanism that converts euros into roubles would be a breach of sanctions.

In 2021, the EU imported 38% of its gas for manufacturing, home heating and gas-to-power generation from Russia.

EWI said if Moscow halted gas now, the EU region plus Britain and excluding Cyprus, Malta and Iberia, would have to cut demand by 459 terawatt hours (TWh) in the summer. It would end up with empty storage facilities within one year.

EWI factored in the anticipated impact of more pipeline gas from Norway and of increased liquefied natural gas (LNG) deliveries in the Netherlands and Germany.

Should the objective be to keep gas reserves at current levels of 33% over the next 12 months, the necessary cut in demand would amount to 790 TWh, it said.

This level represented 18% of total demand between November and April, which EWI pegged at 4,446 TWh. But it hinges on how cold the winter will be.

Germany, which has Europe’s largest storage capacity, has signed off on a law to ensure underground caverns are 80% full by Oct. 1, when the winter season starts.

(Reporting by Vera Eckert, editing by Barbara Lewis)