German Industry Begins Calling For Return to Russian Gas

(Bloomberg) -- Some German industries in the east of the country are already planning for the time when Russian gas returns to Europe encouraged by the efforts of US President Donald Trump to end the war in Ukraine.

Europe has spent three painful years weaning itself off gas from the east with the biggest impact felt in Germany, the region’s biggest economy. German industry was built on cheap Russian gas and rising energy prices have already trammeled growth and forced some manufacturers to move production abroad. 

For Christian Günther, head of the one of the biggest chemical industrial sites in Germany the only way to revive sectors like his is to get hold of cheap Russian gas again. If Europe is expected to help finance Ukraine’s recovery in future, Germany needs to be economically strong to contribute, he said in an interview in Leuna.  

“If peace is achieved, then we must of course ensure that the other damage caused by this conflict is repaired as well,” says Günther, managing director of the Leuna chemical park in eastern Germany. Returning to deliveries of Russian gas “would be the logical consequence.”

If President Donald Trump successfully brokers an end to the Kremlin’s war in Ukraine, gas flows to Europe that were cut could resume. Heads of state will ultimately determine whether the shipments restart, a shift that could be politically unpalatable for some nations. 

Possible routes include restoration of transit via Ukraine or the use of an undamaged Nord Stream link under the Baltic Sea, a direct conduit between Russia and Germany.

There is burgeoning political support for the possibility of a return to Russian gas. The economy minister of Saxony-Anhalt, the state where the Leuna chemical park is located, says that a peace deal would change attitudes to energy from Moscow.

“If we can achieve peace and build long-term trust that Europe is not threatened by Russia, we must also be open to discussing the future supply of Russian gas,” said Sven Schulze. “I think it would be wrong to permanently rule out the resumption of gas supplies.”

Schulze holds this view despite being a member of the center-right CDU/CSU party, showing how the economic pressure is weighing even on the party of potential future Chancellor Friedrich Merz who is currently discussing a huge new defense package to support Ukraine.

A spokesperson for the German Economy Ministry declined to comment directly on speculation about the return of Russian gas flows.

“Independence from Russian gas is of strategic importance to the German government in terms of security policy and is a top priority,” the spokesperson said.

The return of some Russian volumes would help lower gas prices in Europe and provide a bridge until more liquefied natural gas starts arriving in the market from 2026, according to Jonathan Stern, distinguished research fellow at the Oxford Institute for Energy Studies. 

“Longer term, it would depend on what kind of peace agreement and how well both sides adhered to it,” Stern said.

Restarting flows isn’t as easy as it it sounds. Gazprom PJSC’s biggest and oldest European buyers have already cut ties with Moscow. Germany’s Uniper SE and Austria’s OMV AG have terminated their contracts. The region has also moved to install more LNG terminals and signed up deals to receive the tanker-borne fuel from global producers, from the US to the UAE.

The European Union has committed to phasing out Russian energy by 2027 and is due to present a roadmap on how to achieve this next month.

“While some European buyers may still explore short-term transit solutions, EU policymakers have made it a strategic priority, so solving this contradiction will not be easy,” said Tatiana Mitrova, researcher at the Center on Global Energy Policy at Columbia University.

Any peace deal may also take months to finalize, followed by potentially lengthy discussions between Gazprom and its Ukrainian counterparts on details of any potential new transit, should Kyiv give its approval.

The stakes are high as Germany’s economy is on a clear path of decline that threatens to become irreversible. Manuela Grieger, former chair of the InfraLeuna worker’s union, the company running the infrastructure of the chemical park, is also supportive of using Russian gas driven by concerns about the future of industry if prices remain high.

“We need peace,” she said. “We really need peace so that the pipelines open up again, so that the security of supply improves and we have reasonable prices.”

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