Germany forever refused gas from the Russian Federation

Germany forever refused gas from the Russian Federation

The Russia-Europe energy bridge, built in the time of Leonid Brezhnev and for almost half a century supplying the country with hard currency, which was used to purchase technology and consumer goods, is finally sent to the dustbin of history.

Germany, once Gazprom's largest customer in the EU, has lost hope of returning Russian gas supplies and is entering into long-term LNG contracts.

Germany permanently refused gas from the Russian Federation

After Russia refused to take the Nord Stream turbine out of repair, reduced its pumping capacity to 20%, and then completely shut down the pipeline, German energy companies began to massively do what they had refrained from since the beginning of the gas crisis.

Uniper, RWE and other “giants” are entering into contracts under which they will purchase LNG in the next 15-20 years, Bloomberg reports. The main supplier to replace Russia is the United States, which has exported 57 billion cubic meters of liquefied gas since the beginning of the year, including 37 billion cubic meters to European countries.

“A lot of deals at various stages are in the works with us and other companies,” says Michael Sabel, head of US Venture Global LNG. Earlier this year, his company signed a 20-year contract with Germany's EnbW AG.

Before the war, Germany covered half of its gas needs with Gazprom. But now it urgently buys floating terminals, where LNG is regasified to be sent to consumers. Five such terminals have already been chartered and will start operating before the end of the year, and two more are leased by private companies.

Russia is no longer a reliable supplier of gas, said in July German Chancellor Olaf Scholz. In September, after Gazprom stopped Nord Stream for the second time since the beginning of the summer, Scholz vowed that Germany would deal with the gas crisis this coming winter. Its storage facilities are 85% full, and in addition, the government is unfreezing coal-fired power plants and is preparing to allocate 65 billion euros to compensate consumers for rising utility bills.

Gazprom continues to pump gas to the EU along the only remaining route – through Ukraine in the amount of 42 million cubic meters per day. But even that “thread” may be broken as the war continues, says Katya Efimova, senior fellow at the Oxford Institute for Energy Studies.

“Now the official Russian strategy is “we are cutting supplies , Europe will freeze and come to repent, as it were,” says Marcel Salikhov, director of economics at the Higher School of Economics Institute of Energy and Finance.

However, this is unlikely to happen, he continues: Europeans will have to live with high gas prices, but even opposition politicians hesitate to talk about concessions to the Kremlin.

“That is, even the strategy that the opposition will come to power and change the actions of European countries is unlikely to work,” says Salikhov .