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Germany, Europe's largest economy, is largely dependent on
Russian gas to fuel its export-led economy and to keep homes
warm. But the nation has been bracing for a possible complete
halt in Russian supplies if Moscow steps up its use of gas as an
economic weapon against the West while it wages war in Ukraine.
A temporary stop? https://graphics.reuters.com/UKRAINE-CRISIS/zdpxoboxqvx/chart.png
Already down from last year, Russian gas flows slowed even
further through the Nord Stream 1 pipeline last month, and
Berlin moved to the second of three stages of its supply
emergency plan.
Industry executives and economists are scrambling to figure out
how Germany will fare in the coming months and beyond, and where
it is especially vulnerable.
Germany is known for its cars, and its machine tools fill
factories throughout China, but sectors likely to be hardest hit
are also its glass and chemicals industries.
Here are six charts that illustrate Germany's exposure:
1. The Nord Stream 1 pipeline from Russia through the Baltic Sea
is the most important direct gas route into Germany. Before the
start of maintenance, flows were already down to 40% of
capacity, with Russia citing trouble with turbines and
sanctions.
There is concern that after the maintenance period the pipeline
closes for good.
In that event, storage caverns would not be filled in time for
the winter heating season, which is just three months away.
Slower flow https://graphics.reuters.com/UKRAINE-CRISIS/zjvqkzknkvx/chart.png
2. It's not just Germany. Gas flows to Europe are also curtailed
via routes linking Russia with Slovakia, the Czech Republic and
Austria via Ukraine and on another route through Belarus and
Poland.
Gas to Europe https://graphics.reuters.com/UKRAINE-CRISIS/lbvgnxmaypq/chart.png
3. Less gas and caps on prices for consumers have put the
squeeze on energy suppliers like the German utility Uniper,
which is in talks with the government about a possible bailout.
Uniper's plight is so far the most vivid example of the war's
effect on corporate Germany.
Uniper plunge https://graphics.reuters.com/UKRAINE-CRISIS/movananwqpa/chart.png
4. German industry, which includes titans like Volkswagen and
Siemens, is the biggest consumer of gas, but half of all
households, which heat with gas, aren't far behind.
Emergency plans say homes should be prioritised if the state is
forced into rationing, alongside hospitals and essential
services, but there are also calls to make households part of
savings programmes.
Gas sales by customer group https://graphics.reuters.com/UKRAINE-CRISIS/lbpgnxwywvq/chart.png
5. Within the industries consuming gas for their processes,
Germany's chemical sector is the biggest single consumer.
According to Moody's, BASF alone uses 4% of Germany's gas at its
Ludwigshafen site.
"In a scenario of reduced gas availability, European chemicals
producers could face at least two winters with tight gas
supplies," Moody's said in a research note, adding costs would
go up as well.
Gas use by industry https://graphics.reuters.com/UKRAINE-CRISIS/gdpzygnaqvw/chart.png
6. In the grimmest scenario, a complete halt to Russian natural
gas exports could cost Germany 12.7% of economic performance in
the second half of 2022, according to the Bavarian vbw industry
association. That would translate into 193 billion euros
($195.57 billion) in total economic losses.
Germany may be famous for its cars, but the industries that
stand to see their activities most curtailed by lack of gas
include glass, iron and steel, ceramics, food and printing, with
vast knock-on effects to other sectors.
Hardest-hit industries https://graphics.reuters.com/UKRAINE-CRISIS/egpbkgbzgvq/chart.png
($1 = 0.9869 euros)
(Reporting by Vera Eckert and Tom Sims Additional reporting by
Ludwig Burger; Editing by Mark Potter and Louise Heavens)
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