Home Business Swissgas head calls for state guarantees on gas purchases – report

Swissgas head calls for state guarantees on gas purchases – report

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ZURICH — The head of Swiss network operator Swissgas urged the government to guarantee purchases by regional gas utilities that he said in a newspaper interview were struggling to finance deals in a tight market.

“In Switzerland, the four regional companies are responsible for the procurement of winter gas supplies. However, they and their procurement partners are reaching the limit in terms of financial viability and thus capacity to act,” Swissgas President Andre Dose told the Neue Zuercher Zeitung.

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Last month, the government had outlined plans to address a possible shortage of natural gas this winter and said it could resort to rationing should other measures prove insufficient.

Landlocked Switzerland gets its gas via trading hubs in neighboring countries in the European Union, so disruptions there would also affect Switzerland.

“Gas prices have risen so much that suppliers are demanding astronomically high financial guarantees for the options. Most banks and shareholders are no longer prepared to provide these guarantees within the required timeframe.”

He said such state guarantees were not under discussion.

“And I think that is wrong. I assume that the gas price will continue to rise from around 170 euros per megawatt hour today to up to 250 or even higher. If you want to secure procurement at these prices, you need state guarantees,” he said, citing Germany as a model on how to do this. (Reporting by Michael Shields; Editing by Sherry Jacob-Phillips)

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