Germany would like to make itself independent of Russian natural gas. That’s easy to say, because Russian companies own many important pipelines, storage facilities and refineries in the east. The federal government is now considering nationalization.
Jemgum is located where the Ems flows into the North Sea. Around 3,600 people live here, most of whom make a living from agriculture or fishing. But the true riches of the church are underground. A company called Astora has been building natural gas storage facilities in former salt domes since 2013. There is space here for more than a billion cubic meters, enough gas to supply a city like Cologne for a year.
The storage facilities in Jemgum are only the second largest in the country. A little more than 100 kilometers to the south-east, under the 2250-inhabitant community of Rehden near Oldenburg, there are even up to 4.2 billion cubic meters. The gas storage facilities here, the largest even in Western Europe, are operated by Wingas, Astora’s parent company.
However: Neither Wingas nor Astora are German companies. Until recently, they belonged to Gazprom Germania, the German subsidiary of the Russian commodities giant Gazprom. The largest natural gas storage facilities in Germany are therefore in Russian hands – and they are no exception. Through its gas giants, Russia owns shares in other important infrastructure parts of the German energy supply.
For example, there is the PCK refinery in Schwedt in the Mecklenburg Uckermark. Until 1991, PCK stood for Petrol-Chemical Combine, an institution of the former GDR. Although the acronym now has a different meaning, only part of the refinery passed into German ownership. The Russian utility Rosneft controls directly (37.5 percent) and through its refining
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The oil processed here has come exclusively from Siberia since 1963 and is delivered via the Druzhba pipeline (“friendship”) through Belarus and Poland to Rostock. The pipeline belongs – you guessed it – to the Russian state-owned company Transneft. The PCK refinery in turn operates its own line from Rostock to Schwedt.
Schwedt is not the only German refinery in which Rosneft has at least a stake. The Russian giant holds a 24 percent stake in Germany’s second largest factory, MiRo in Karlsruhe, and around 29 percent in the Bayernoil refinery in Vohburg an der Donau in Bavaria.
Other refineries and the supply of natural gas also depend on Russian companies. It’s not just about the big pipelines like Druzhba, which deliver the raw materials to East Germany. Even within the country, many tubes are in Russian hands. The PCK refinery in Schwedt alone operates five pipelines that carry oil across the country from the Polish border or the Baltic Sea coast.
Gazprom Germania, in turn, owns half of the JAGAL pipeline, which receives Russian natural gas at the Polish border and distributes it to Berlin, Brandenburg, Saxony, Saxony-Anhalt and Thuringia. Gascade, the responsible joint venture between Gazprom and Wintershell DEA, also controls the MIDAL gas pipeline from the Jemgum and Rehden storage facilities to Mannheim, the NEL pipeline from Lubmin on the Baltic Sea to Lower Saxony, the OPAL pipeline from Lubmin through East Germany, the Rehden-Hamburg gas pipeline, the STEGAL through Saxony and Thuringia and the WEDAL from the Belgian border to East Westphalia.
These ownership structures are a problem at a time when Germany and Russia are literally at loggerheads. For example, Gazprom barely filled the storage facilities in Rehden and Jemgum last winter. It is rumored that this was intended to inflate the price of gas. Elsewhere, too, the control of Russian companies over important infrastructure gives Russia plenty of room for attack against Germany.
Federal Minister of Economics Robert Habeck (Greens) would like to prevent that. He has been working for months to make Germany’s energy supply less dependent on Russian oil and gas. However, simply importing raw materials from other countries is difficult when Russia can influence processing and transport in our country.
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As a first step, Gazprom Germania was nationalized in mid-April. The case is a little more complicated than this simple sentence might suggest. Gazprom began changing ownership of its German subsidiary at the end of March. On March 25, it sold 100 percent of Gazprom Germania’s shares to its other subsidiary, Gazprom Export Business Services (GPEBS). Of which, on March 31, 0.1 percent was sold to the Moscow company Palmary. The 99.9 percent of the remaining shares were set without voting rights, which means that Palmary, with a 0.1 percent stake in Gazprom Germania, owned 100 percent of the voting shares.
Since the gas storage facilities of Gazprom Germania are critical infrastructure, the Ministry of Economic Affairs intervened. Officially, the Federal Network Agency was appointed as a trustee for Gazprom Germania in order to ensure security of supply. In fact, this is tantamount to nationalization. But the trouble is not over: At the beginning of April, the Federal Network Agency reported that Gazprom Germania could file for bankruptcy. Insolvency of the storage operators would significantly exacerbate the energy crisis in Germany. Then this week, Russia banned Gazprom from doing business with its former subsidiaries abroad. Gazprom Germania has not been supplied since then.
Thoughts about further nationalizations exist. Next up could be the PCK refinery in Schwedt. Here, the British group Shell wants to sell its shares to Rosneft, which would then control 92 percent of the plant. The Federal Cartel Office had approved this deal just the day before the Ukraine invasion on February 23. Now the Ministry of Economy has got involved. It is said that the deal is being examined – but only from a competition law perspective.
However, nationalization of the infrastructure would not immediately solve the dependency on Russia. After all, pipelines and refineries need to be supplied with oil and gas, no matter who owns them. This means that either the facilities would continue to be operated with Russian raw materials even after nationalization, or they would have to be shut down until other sources were found. However, this can take months or years.
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