Germany has reportedly agreed to nationalize its largest gas importer Uniper to fight the impending crisis as the country battles energy shortages because of the Russia’s war in Ukraine.

The agreement is based on a rescue plan, which concluded in July when Berlin acquired a 30% stake in the business. It also involves an €8 billion (£7 billion) government capital infusion.

Fortum, a state-owned energy corporation in Finland that had previously controlled Uniper, welcomed the move. The state will own 98.5% of the gas company after Berlin agreed to purchase Fortum’s shares for €500 million ($495 million).

Markus Rauramo, CEO of Fortum, stated that divesting from Uniper was the best course of action for both Fortum and Uniper given the current state of the European energy industry and the gravity of Uniper's situation.

Since Russia's war on Ukraine, the significance of gas in Europe has drastically transformed, as has the prospects for a gas-heavy portfolio. The business proposition for an integrated group is therefore no longer compelling.

According to Rauramo, Uniper has lost close to €8.5 billion ($8.1 billion) owing to Russia's ban on natural gas exports to European nations backing Ukraine. Missing Russian shipments had to be substituted with costly supplies from the open market, where prices of gas have increased significantly.

Uniper, which also controls the Nottinghamshire-based power station Ratcliffe-on-Soar, reported a total loss of £12 billion ($13.6 billion) in August and saw its share price fall by 90% in the last year.

Europe depends on gas to power factories and heat homes, which increases concerns about business rationing, closures, and a recession as the weather gets colder.

Across the continent, nations are scurrying to secure their winter energy supply, combat skyrocketing gas and electricity prices, assist people and companies, as well as fill natural gas storage.

Germany also acquired control of three oil refineries owned by Russians last week, just before a ban on Russian oil goes into effect next year.

Source credit: https://www.theguardian.com/business/2022/sep/21/germany-nationalises-biggest-gas-importer-avert-supply-crisis