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Germany prepared to stop buying gas from Russia

·Finance Reporter, Yahoo Finance UK
·2-min read
Germany  an employee checks a gas valve at the Atamanskaya compressor station, part of Gazprom's Power Of Siberia gas pipeline outside the far eastern town of Svobodny, in Amur region, Russia November 29, 2019. Picture taken November 29, 2019. REUTERS/Maxim Shemetov.
Germany wants to become independent of Russian gas. Photo:Maxim Shemetov/Reuters

Germany is ready should Russia stop exporting gas to the country as Berlin develops a new energy battle plan to end that reliance.

The country’s economy minister told Deutschlandfunk radio that in the case that Russia cuts off its gas supply, Germany was ready to boost strategic reserves.

“We are prepared for that. I can give the all-clear for the current winter and summer,” Robert Habeck said.

"For the next winter, we would take further measures," he added.

Read more: Stock markets rise as Biden declares Putin 'dictator' in State of Union address

Germany relies on Russia for more than half its natural gas, and a decision to phase out nuclear power has left Europe’s largest economy vulnerable to disruption.

Habeck pointed to planned new legislation to ensure gas storage is full for winter. "It's about no longer being so closely tied to Russia," he said Habeck.

"I am introducing a law that will require the operators of the storage facilities to be full at the beginning of winter."

In case Moscow cuts Germany off, the minister said Berlin could keep “coal-fired power plants in reserve, maybe even keep them running.”

“So we are also taking precautions for the worst case, which has not happened yet because the Russians are delivering.”

The minister said Germany had also build up an oil reserve that would allow the country to get through winter in case of any supply chain disruptions.

“The more we rely on our own energy sources and the more these own energy sources are not dependent on imports, the more confidently we act," said Habeck.

Read more: British Gas owner Centrica exits gas deals in Russia

On Tuesday, European Commissioner for Competition, Margrethe Vestager, said the EU could not “ban Russian gas completely.

A rapid escalation in sanctions against Russia could further deepen a cost of living crisis.

"German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline," Dmitry Medvedev, a former Russian president and the deputy chair of Russia's security council, said in a tweet.

"Well. Welcome to the brave new world where Europeans are very soon going to pay €2,000 for 1,000 cubic meters of natural gas!" he added.

Russia supplies around 40% of Europe’s gas. So far, the Kremlin has not hinted at any intentions of cutting off Europe.

Russian state gas company Gazprom said that it was shipping gas to Europe via Ukraine in line with customers' requests.

Watch: Sanctions on Russia means gas prices will continue to rise

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