german energy giant Unite warned on Tuesday that the worst was yet to come as concerns over Russia’s gas supply to Europe through the fall and winter continued to drive up prices.
“I’ve said it many times over this year and I’m also educating policy makers. Listen, the worst is yet to come,” Uniper CEO Klaus-Dieter Maubach told Hadley Gamble of CNBC at Gastech 2022 in Milan.
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“What we see in the wholesale market is 20 times the price we saw two years ago – 20 times. That’s why I think we need to have a really open discussion with everyone who takes responsibility on how to solve this problem,” he added. .
On Friday, the Russian energy giant, Gazprom indefinitely halt gas flows to Europe via a major pipeline, stoking fears that parts of Europe could be forced to ration energy over the winter.
Uniper, as Germany’s largest gas importer, has been hit hard by the drastic reduction in gas flows through pipelines from Russia, which drove up prices.
Uniper has requested billions in financial aid from the German government due to soaring gas and electricity prices.
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The German government agreed in July to bail out Uniper with a 15 billion euro ($14.9 billion) bailout deal to provide the beleaguered company with some financial relief. Maubach said on Tuesday that some details still needed to be ironed out with this stabilization package.
The shutdown of supplies from Russia via Nord Stream 1 and the resulting spike in European gas prices could worsen the company’s situation.
Uniper shares were down 3.5% on Tuesday morning. The Frankfurt-listed share price has fallen more than 88% since the start of the year.
The partnership with Gazprom is “broken”
Gazprom’s announcement came shortly after economic powerhouses in the G-7 supported a plan to propose a cap on the price of Russian oil.
Gazprom said the shutdown was due to an oil leak in a turbine. The Nord Stream 1 gas pipeline, which connects Russia to Germany via the Baltic Sec, was due to reopen on Saturday after three days of maintenance work.
The Kremlin has since blamed European lawmakers for shutting off gas supplies via Nord Stream 1, saying economic sanctions imposed by the West following Russia’s invasion of Ukraine hampered repairs.
This has been widely interpreted as the clearest indication yet that Russia is likely to press for Europe to lift punitive economic sanctions in order for the Kremlin to reopen the taps.
EU policymakers have accused the Kremlin of militarizing energy supplies in a bid to sow uncertainty in the 27-nation bloc and raise energy prices amid the Kremlin’s onslaught in Ukraine.
Asked if there was a chance Uniper could work with Gazprom again if the Kremlin’s war with Ukraine ended, Maubach said the company’s relationship with Russia dates back to the 1970s and that he had personally defended Gazprom as a reliable energy supplier after the start of the war. with Ukraine at the end of February.
“That, in hindsight, was maybe even a mistake to think the gas wouldn’t be used. Maybe it was just wishful thinking,” Maubach said.
“I think that partnership is broken and I don’t think we can restore it in the next few weeks, months and years to come. So our focus is on replacing Russian gas,” he added.