EASTERN GERMANY GAS SUPPLY CUTOFF LOOMS
The long running dispute over the price of Soviet natural gas deliveries to eastern Germany has reached crisis point.
Effective Jan. 1, the Wintershall AG/Gazprom joint venture has threatened to cut off gas supplies to the German transmission company Verbundnetz Gas AG, currently running at 98.9 bcf/year.
BACKGROUND
Since early this year VNG has refused to accept a 25% price increase and has continued to pay Wintershall/Gazprom at the pre-1991 rate.
Wintershall said VNG has accumulated debts of 130 million deutschemarks ($81.25 million), which is expected to rise to 150 million deutschemarks ($93.75 million) by yearend.
Ruhrgas AG, western Germany's biggest gas company and a major shareholder in VNG, said it does not have pipeline capacity to make good the shortfall in deliveries from other sources.
Since the end of October Ruhrgas has been supplying 176 MMcfd of natural gas to VNG to compensate for cuts made by Wintershall as of Oct. 1.
VNG said the threatened cutoff was an attempt by Wintershall to exploit its monopoly position and impose a prohibitive price that would jeopardize economic recovery in eastern Germany and place an intolerable strain on the economy.
The dispute has already been taken to the district court in Leipzig, but Wintershall said it is uncertain when a ruling would be given. With VNG saying it plans to take the dispute to the appellate court and Germany's supreme court, Wintershall said it could take years to get its money.
WINTERSHALL CLAIMS
Wintershall also said it has evidence VNG is prepared to pay prices above the new Soviet import price when purchasing gas from two of its shareholders, BEB-A venture of Royal Dutch/Shell Group and Exxon Corp.and Ruhrgas.
VNG had also made an offer of higher prices direct to the Soviet gas supplier, Wintershall alleged.
"This offer proves that for VNG it is not a matter of price but simply and solely a matter of eliminating undesired competition," Wintershall said.
Wintershall added that its joint venture partner Gazprom cannot understand why a market economy tolerates such arbitrary consumer behavior.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.