FRANKFURT, July 11 (Reuters) – Germany, the world’s fourth-biggest financial system, is getting ready for all situations together with a whole cease to Russian fuel provides as soon as a daily 10-day upkeep interval on the large Nord Stream 1 pipeline ends.

Upkeep on the pipeline, which carries Russian fuel instantly into Germany, started on July 11 however Berlin is factoring in fuel being utilized by the Kremlin to exert political strain on the West, one thing denied by Moscow. learn extra

Listed below are among the dangers ought to the outage interval last more or the pipeline reopen with decreased flows.

WHY IS NORD STREAM 1 SO CRUCIAL?

It’s the greatest single route for Russian fuel into Germany, bringing 55 billion cubic metres (bcm) a 12 months. Germany consumed 100 bcm final 12 months.

Russian fuel transits by way of Poland have stopped this 12 months and people by way of Ukraine have been curtailed by the struggle.

Half of German households depend on fuel heating, significantly from October by way of March and failure to reopen Nord Stream 1 would scupper plans to fill underground fuel storage earlier than winter.

The caverns might in concept meet nationwide demand for 2-1/2 months, however are solely 64.6% full, in contrast with an Oct. 1 goal of 80%.

In the meantime, the marketplace for different fuel origins is tight worldwide and costs have soared since final 12 months as demand recovers after the pandemic.

HOW AND WHEN WOULD GERMANY LIMIT GAS TO CONSUMERS?

If Germany pulls the set off on the emergency section of a three-stage escalation plan, the Bundesnetzagentur community regulator can be tasked with guaranteeing that fuel is distributed pretty.

The stage can be triggered by exceptionally excessive demand for fuel or a major disruption to provide, for instance if Nord Stream 1 was to stay closed.

Germany has been in stage two since June 23 after Nord Stream 1 volumes dropped to 40% of capability. learn extra

WHICH SECTORS ARE MOST AT RISK?

Chemical, metal, glass and paper producers are Germany’s main industrial fuel customers, however results would ripple so far as meals and porcelain manufacturing. learn extra

The aluminium business, with gross sales of 22 billion euros and 60,000 workers, depends on fuel for melting and recycling.

Within the paper business, with a turnover of 15.5 billion euros and 40,000 workers, operators say paper and cardboard are important for meals, drugs and hygiene articles.

WHAT ARE COMPANIES DOING?

Germany’s greatest fuel importer Uniper (UN01.DE) has requested for a authorities bailout {that a} political supply stated runs to 9 billion euros, and different utilities might face related issues. learn extra

Main steelmaker Thyssenkrupp (TKAG.DE) is drawing up plans for disruptions, in response to a spokesperson, as utilizing oil or coal as a substitute of fuel just isn’t doable. Ought to sure minimal allocations be denied, Thyssenkrupp vegetation might have to shut and technical harm to aggregates is feasible.

Reducing fuel provide to aluminium vegetation by even 30% would imply half of them would stand idle, business group Aluminium Deutschland says. Distinguished gamers are Hydro Aluminium, Speira and Trimet.

Chemical compounds large BASF (BASFn.DE) wants to keep up fuel provides of round 50% of its most demand and a halt to Russian flows would set off a company-wide emergency plan.

Main paper corporations are Stora Enso (STERV.HE), UPM and Mitsubishi Hitec Paper Europe.

WHAT COULD HAPPEN TO THE ECONOMY?

Within the grimmest prediction up to now, the Bavarian vbw business group stated the nation might lose 12.7% of its financial efficiency within the second half of 2022 within the occasion of a whole halt to Russian fuel provides. learn extra

WHAT ARE THE SOCIO-POLITICAL RISKS?

Social strife over fuel might reinforce populists on the far proper and much left of the political spectrum, doubtlessly eroding rational discourse on find out how to proceed.

Berlin has authorised a regulation protecting open choices to cross on sky-high costs instantly, or alternatively search to distribute hikes extra typically amongst customers. learn extra

Reporting by Vera Eckert and Tom Kaeckenhoff, extra reporting Patricia Weiss, Ludwig Burger, Christoph Steitz, Tom Sims, Hakan Ersen, enhancing by Kirsten Donovan

Our Requirements: The Thomson Reuters Belief Rules.