Saturday, May 21, 2022

Germany moves toward gas rationing in a standoff over ruble payments.

Credit…Bernd Von Jutrczenka/DPA, via Associated Press

BERLIN — Germany began preparing for eventual shortages of natural gas on Wednesday, as the country’s economy minister pointed to growing concerns that Russia could cut off deliveries unless payments on existing contracts were made in rubles.

The government activated the first step of a national gas emergency plan that could, eventually, lead to the rationing of natural gas. Wednesday’s action — the first step, or “early warning stage” — involves setting up a crisis team of representatives from the federal and state governments, regulators and private industry, said Robert Habeck, the economy minister and vice chancellor.

The move illustrates the risk facing European countries that rely on Russian oil and gas as the war in Ukraine drags on. On Monday, energy ministers from the Group of 7 nations rejected a demand by Russia that the country be paid for its supplies in rubles. Several European energy companies have said payment in rubles would require a renegotiation of long-term contracts.

“We will not accept any breach of the private contracts,” Mr. Habeck said.

The ongoing standoff is part of attempts from President Vladimir V. Putin of Russia to push back against a wide-ranging raft of economic sanctions aimed at punishing the Kremlin for invading neighboring Ukraine.

“We must increase precautionary measures to be prepared for an escalation on the part of Russia,” Mr. Habeck told reporters. “With the declaration of the early warning level, a crisis team has convened.”

The team will meet daily to monitor the situation and establish measures that could be taken if supplies start running low, which Mr. Habeck is not stressed yet the case. Only if the situation were critical enough would the government intervene to begin rationing natural gas supplies. In that case, according to a planning document, households and critical public services, including hospitals and emergency services, would be prioritized over the industry.

Roughly half of Germany’s homes rely on natural gas for their heating, and 55 percent of the country’s gas comes from Russia. It arrives via overland pipelines through Ukraine and Poland and through the original Nord Stream pipeline under the Baltic Sea. A sister pipeline that was awaiting German approval, Nord Stream 2, was effectively frozen by the government two days before Russian tanks rolled into Ukraine.

“Security of supply continues to be guaranteed,” Mr. Habeck said. “There are currently no supply bottlenecks. Nevertheless, we must increase precautionary measures to be prepared for an escalation on the part of Russia.”

Gazprom, Russia’s state-owned energy company, said on Wednesday it had continued to supply gas to Europe via Ukraine in line with requests from European consumers and that flows remained high. Gas was also flowing westward through a pipeline that crosses Poland from Russia for the first time since March 15, it said.

Poland has been lobbying its European Union partners to end their dependence on Russian energy as quickly as possible. The government in Warsaw has a pipeline linking the country to Norway that is expected to open by the end of the year, and capacities for liquefied natural gas would be increased. The country also announced it would stop importing Russian oil by the end of the year.

In Athens, the Greek energy ministry called an emergency meeting of all players in the country’s gas market to discuss alternative options for procuring natural gas in the event of an interruption in Russian gas supplies, the ministry said.

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Moscow has not said when the demands for ruble payments will begin, but it is expected to present its plans later this week. But at a news conference on Wednesday, Dmitry S. Peskov, Mr. Putin’s said, indicated that things might not move as quickly as some in Europe have feared.

“Payments and deliveries take some time,” Mr. Peskov said. “It doesn’t mean that everything that gets delivered tomorrow must be paid for by the evening. It is a process that is stretched in time.”

Russia’s top lawmaker warned on Wednesday that oil, grain, metals, fertilizer, coal and timber exports could also soon be priced the same way.

Mr. Habeck also urged German consumers and companies to begin making efforts to cut their energy use wherever possible. “Every kilowatt-hour counts,” he said.

Ivan Nechepurenko and Niki Kitsantonis contributed reporting.

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