Merkel-Allied State Seeks German Gas Reserve on Gazprom Concern

German Chancellor Angela Merkel was urged by Bavaria’s state government to create a national gas reserve as Russia’s Gazprom OAO (GAZP) prepared to control about a fifth of the country’s storage capacity.

“Foreign companies” are buying up gas storage and may be able to control supplies for “strategic purposes,” the Bavarian chancellery in Munich said today in a statement. The proposal is scheduled for debate tomorrow in the German parliament’s upper house, or Bundesrat.

Bavaria, home to companies such as Linde AG, Siemens AG (SIE) and Bayerische Motoren Werke AG (BMW), is reacting to Gazprom’s acquisition of sole control over German gas storage company Wingas GmbH this year in an asset swap with BASF SE (BAS)’s Wintershall unit. Kassel, Germany-based Wingas owns about 20 percent of national storage capacity.

Germany’s Economy Ministry, run by Merkel’s Social Democratic coalition allies, declined to endorse the Bavarian plan. Germany’s experience with companies that supply the nation’s gas has been “good,” ministry spokesman Adrian Toschev said in an e-mailed reply to questions. “That said, the role of storage facilities is being discussed,” he said.

Germany’s gas storage capacity of 21 billion cubic meters is the world’s fourth-largest and covers about a fifth of annual consumption, Toschev said. “At this time, there are no indications of any supply bottlenecks,” he said.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net; Julia Mengewein in Frankfurt at jmengewein@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Tony Czuczka, Eddie Buckle

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