Snapshot
Warning of significant disruption to its European operations, German chemicals behemoth BASF said that if its gas supply to the company is halved it will be forced to halt production at the world’s biggest chemicals plant in Ludwigshafen.
BASF’s warning came as German government triggered the first stage of its national gas supply emergency plan over fears that Russia might soon cut supplies if it doesn’t receive payments from foreign buyers in roubles.
Warning of significant disruption to its European operations, German chemicals behemoth BASF said that if its gas supply to the company is halved it will be forced to halt production at the world’s biggest chemicals plant in Ludwigshafen.
BASF’s warning came as German government triggered the first stage of its national gas supply emergency plan over fears that Russia might soon cut supplies if it doesn’t receive payments from foreign buyers in roubles.
The G7 group earlier rejected Russia’s demands to switch gas contract payments to roubles saying that it would undermine the sanctions imposed on the country in response to its attack on Ukraine.
BASF said gas shortages would have a dual impact on chemical production. Not only will it cause shortage of energy for the production process, the chemical giant added that it will also impact critical raw material for the manufacture of products.
There is no substitute for the gas as a raw material or as an energy source, the company added.
Over a third of all BASF employees (numbering 39000) work in Ludwigshafen complex which is spread over 10 Sq Km area. The complex houses around 200 plants producing thousands of products for customers from virtually every industry. The portfolio extends from basic chemicals, intermediates and plastics to refining and crop protection products.
National Gas Supply Emergency Plan
The government called on all consumers to save energy and make existing supplies last longer, with gas storage levels currently running at 25 percent. The declaration of the “early warning” stage is a precautionary measure and supplies are safe for the time being, said economy minister Robert Habeck.
“We are now in a situation where every kilowatt-hour that is not used helps,” Habeck said. “Therefore, I would like to combine the declaration of the early warning stage with an appeal to private consumers and companies that they help us, that they help Germany, that they help Ukraine when they save gas, or energy altogether.”
Germany is heavily reliant on imports of Russian gas, oil and coal, but Habeck said the country had already reduced its dependence “On average, we in Germany have imported 55 percent of our gas from Russia in recent years, and this has now gone down to 40 percent,” Habeck said.