The Federal Ministry of Economics commissions Sefe to purchase natural gas to fill storage facilities

Berlin. Federal Minister of Economics Katherina Reiche (CDU) has commissioned the federal gas importer Sefe to purchase natural gas in order to increase the filling level of gas storage facilities in Germany. The Handelsblatt learned this from government circles.

According to the information, Sefe has already started shopping. The purchases were made “in small steps” so that they remained as under the radar of market participants as possible. There is a realistic chance of “implementing the filling in a minimally invasive and cost-efficient manner”.

The aim is to raise the filling level of the gas storage facilities to a value of over 70 percent. It is currently almost 56 percent. This means that it has already risen slightly in the past few days.

Reiche is making a U-turn. The minister had previously rejected state intervention to fill the storage tanks because she feared this would further drive up prices. She has had to accept criticism for this in recent weeks - including from within her own ranks.

The current storage level is well below the usual values ​​for this time of year. According to legal requirements, the storage facilities must be 80 percent full by November 1st. However, exceptions apply for some memories. That's why the calculated target value is 71 percent. If the Economics Minister's plan works, this value will still be achieved, although possibly with a slight delay.

The federally owned energy company Uniper is reportedly not involved in the campaign. The Federal Ministry of Finance is responsible for supervising the federal government's participation in Uniper; in the case of Sefe, it is the Federal Ministry of Economics.

Sefe is a major player in the energy market. The company trades, transports and stores gas and supplies around 50,000 industrial customers and municipal utilities in Europe. This also includes the operation of important gas storage facilities and pipeline networks.

According to information from Handelsblatt from people familiar with the processes, the reason why Uniper is not purchasing gas on instructions from the federal government is the reservations of the Federal Ministry of Finance. Accordingly, the Federal Ministry of Finance rejects the action because it fears that it could have a negative impact on the company's planned privatization.

Both companies were nationalized in the wake of the gas supply crisis in 2022. The EU Commission had linked the state's entry to the condition that the companies must be privatized by the end of 2028 at the latest. The federal government may retain a maximum of 25 percent plus one share.

The Federal Ministry of Economics considers the possible effects on privatization to be manageable. Government circles said that Minister Reiche's entourage is assuming that Sefe's balance sheet will be burdened with an amount of "between 40 and 60 million euros". That is easy to cope with. This will not have a significant impact on privatization because the burden can be easily communicated to any potential investor. The counterarguments from the Federal Ministry of Finance are not plausible.

The background to the slow filling of the gas storage facilities is the ongoing dispute over the Strait of Hormuz. It makes the transport of gas and oil more difficult. That increases prices. For traders who normally buy gas at low prices in the summer and store it in order to sell it during the winter heating season, purchasing gas is currently economically unattractive.

A similar situation occurred in 2022 after Russia's attack on Ukraine. The traffic light coalition at the time spent billions of dollars in tax money to ensure that the storage facilities were filled. Critics said that securing the gas supply had been bought at too high a price at the time: the state had signaled its willingness to replenish supplies “at any price”, thereby fueling speculation and driving up the price level further.

At that time, the Ministry of Economic Affairs commissioned Trading Hub Europe GmbH (THE) to carry out the purchasing. However, THE does not have the same opportunities for gas purchasing on a large scale as Uniper and Sefe. THE has the legally defined function of “market area manager”.

The company must ensure that natural gas supply and demand are continuously balanced and is financed from the network fees that gas consumers pay. THE is therefore not a gas importer of global importance. The company only uses the European gas exchange TTF. Uniper and Sefe, on the other hand, are active in the global gas business.