Germany nationalizes gas supplier Uniper after EU approval

A police boat drives past the construction site of the 'Uniper' LNG (Liquefied Natural Gas) terminal in Wilhelmshaven, Germany, on Nov. 15, 2022. (AP Photo/Michael Sohn, File)

BERLIN — The German government said Thursday that it has nationalized energy company Uniper after the European Union gave its blessing for it to rescue the gas supplier.

The government announced its plan to nationalize Uniper in September, expanding state intervention in the energy sector to prevent a shortage resulting from Russia's war in Ukraine. The deal built on an initial rescue package agreed in July and features a capital increase of 8 billion euros (US$8.5 billion) that Germany is financing.

Uniper's existing shareholders approved the measures on Monday. The EU's executive Commission gave its conditional approval on Tuesday. The government is obliged to reduce its stake to 25 per cent plus one share by 2028, a deadline that can only be extended with the Commission's approval.

Germany's finance and economy ministries said Thursday that the government has now taken a stake of some 99 per cent in the company. Uniper's existing management remains in place.

Uniper was controlled until now by Finland-based Fortum. The Finnish government has the largest stake in Fortum.

Before the war in Ukraine, the company bought about half of its gas from Russia, which started cutting deliveries to Germany in June and hasn't supplied any gas to the country since the end of August.

Uniper has incurred huge costs as a result of those cuts because it was forced to buy gas at far higher market prices to meet its supply contract obligations. Last month, it said it had initiated proceedings to seek damages from Russia's Gazprom at an international arbitration tribunal in Stockholm.