Germany steps closer to natural gas rationing

The German government is calling on shippers to voluntarily increase their supply of natural gas to the country and on users to reduce their consumption of it after Russia’s tightening of supply to Europe. Russia has threatened to cut all gas exports to “unfriendly” countries. If that occurs, the chemical sector in Germany—and elsewhere in Europe—“would face serious difficulties,” as it is one of the most energy-intensive and gas-reliant industries, the credit rating agency Moody’s Investors Service states in a new report. Under emergency protocols in Germany and other countries, including the UK, households and critical infrastructure would be allocated gas ahead of the chemical industry. BASF consumes about 4% of Germany’s natural gas. The chemical maker warned in March that it would have to shut down facilities if gas supplies failed to meet at least half its needs. BASF now expects already-high gas prices to rise further. “In a scenario of reduced gas availability, European chemicals producers could face at least two winters with tight gas supplies,” Moody’s states.