By Andrea Thomas
BERLIN (Dow Jones)–Germany has significantly reduced its dependence on Russian gas in recent months. However, according to estimates by the Federal Ministry of Economics, it will take a national effort to free oneself entirely from Russian gas supplies.
According to the “Third Progress Report on Energy Security” by the Economics Ministry, the share of Russian gas deliveries fell to 26 percent from the previous 55 percent by the end of June. “This is also a consequence of the actions of the Russian supplier Gazprom, which reduced the gas flows via the Nord Stream 1 pipeline to 40 percent in June on the pretext of technical issues,” says the report. “In July 2022, the share of Russian gas supplies will fall even further due to the annual pipeline maintenance, during which no gas flows.”
As an alternative to Russian gas, Germany has increased its natural gas purchases from Norway and the Netherlands and significantly increased its imports of liquefied natural gas (LNG).
“However, independence from Russian gas can only be achieved through a national effort. Many steps are required by many players at the same time – federal, state, local authorities, companies and private households,” says the paper.
In order for the floating LNG terminals planned for 2022 and 2023 to be put into operation in Germany, an “enormous” effort is required from everyone involved, according to the ministry.
Solution for oil refinery Schwedt still pending
With regard to Germany’s dependence on Russian oil, the report states that dependence has also been reduced here. However, East Germany in particular faces challenges in coping with the lembargo imposed by the European Union (EU) on Russian imports. Last year, imports from Russia served about 35 percent of German crude consumption.
In East Germany, the process of decoupling from Russian oil is demanding because the refinery sites in Leuna and Schwedt, which supply petrol stations, airlines, private households and companies with petrol, diesel, aviation fuel and heating oil, among other things, almost exclusively obtained their crude oil via pipelines from Russia . These conversion processes for decoupling from Russian oil will run until the end of the year.
“However, due to special ownership and delivery structures, there is still a share of around 12 percent of the crude oil requirement (mainly Schwedt and to a small extent Leuna), for which substitution solutions are being worked out intensively,” says the report.
Due to the new supply contracts, the end of all supply relationships with Russia for the refinery in Leuna is possible by the end of 2022. It’s more difficult at Schwedt because it is majority-owned by the Russian state-owned company Rosneft. According to the ministry, a voluntary termination of the supply relationship with Russia is not to be expected.
“An alternative way of supplying the refinery in Schwedt via the port of Rostock and the Rostock-Schwedt pipeline is only possible up to a capacity utilization rate of around 55 percent,” says the report. “The federal government is therefore working intensively to solve this challenge in order to create the conditions for complete independence from Russian crude.”
Reduced dependency on Russian coal
Germany is making progress in implementing the EU import ban on Russian coal. As a result of the contract changes, Germany’s dependency on coal has fallen from 50 percent to around 8 percent since the beginning of the year. The ban on buying and importing Russian coal and other solid fossil fuels came into effect on April 9 as part of the EU’s Fifth Sanctions Package. Existing contracts that were concluded before this date can therefore still be executed until August 10, 2022. The conclusion of new purchase contracts has been prohibited since April 9 without a transitional period.
Overall, the Ministry emphasizes in its report that reducing energy consumption is a key to precautionary measures in the current tense energy situation.
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DJG/aat/sha
(END) Dow Jones Newswires
July 20, 2022 07:42 ET (11:42 GMT)