Sun, 03 Dec 2023

Participants in global wholesale trading cannot track the origin of fuel they purchase, CEO points out

Russian supplies of liquefied natural gas (LNG) may still be shipped to German terminals despite pledges by energy major Uniper, according to its chief executive, Michael Lewis.

"Russia keeps selling LNG to the world market," he said on Saturday in an interview with Germany's Rheinische Post newspaper. "The wholesalers, including Uniper, do not always know the origin of the purchased gas."

The company halted purchases of gas from Russia at the end of August 2022 after Brussels introduced sanctions against Russia over the military operation in Ukraine. In February, Uniper posted a record loss of €19.1 billion ($20.3 billion) for 2022, citing the complete freezing of the Russian gas supply as a major reason for the drop.

Germany is better prepared for an upcoming winter than a year ago as the country's gas storage facilities are 95% full, according to Lewis, who has, however, warned of potential risks.

"If it gets very cold or there are problems with LNG purchases, then this winter could be tight," the executive said. "If China's economy grows and the need for LNG increases, Europe will face shortage of the fuel, as well as the price spikes."

Lewis stressed that concerns over sufficient gas supplies remained, adding that even minor disruption may provoke a surge in energy prices. Nonetheless, the top official doesn't expect prices to rally as much as during the previous season.

The German Ministry of the Economy said that Berlin supports a halt to Russian supplies of LNG to Germany, but admits that it would be difficult for the country's importers to abstain from Russian deliveries, as it is impossible to trace them.

For more stories on economy & finance visit RT's business section


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