Germany's Gazprom move offers only temporary respite
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Loading... - Flavia Donato
- 05 Apr 2022
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Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) has temporarily appointed the country’s energy regulator, the Bundesnetzagentur (BNetzA), as fiduciary to act on behalf of Gazprom Germania, the subsidiary of Russia’s Gazprom that controls the company’s European gas trading, storage, pipeline and wholesale and retail sales arms, as well as its global LNG and oil trading and shipping businesses. The BMWK cites its operation of “critical infrastructure in Germany” and resultant “outstanding importance” in the country’s gas supply as justification for the move.
The ministry is also concerned by “unclear legal relationships” and “violation” of legal reporting obligations, after Gazprom attempted to transfer ownership of the unit to the previously unknown Palmary and Gazprom export business services firms. “It is not clear who is behind [the two firms] in commercial and legal terms,” BMWK says.
“As Gazprom Germania operates critical infrastructure, any acquisition by a non-EU investor must be approved by the ministry,” it continues. “In addition, the acquiring party has ordered the liquidation of Gazprom Germania, which, as long as the acquisition is not approved, is not in conformity with the law.
“The BMWK has not granted permission for the acquisition. Thus, any legal act connected with this, and also the acquisition as such, is provisionally invalid. Palmary is thus not the new indirect owner of Gazprom Germania,” it concludes.
The European gas, power and carbon markets, as well as LNG and oil traders, can breathe at least a temporary sigh of relief at the greater certainty over Gazprom Germania’s status. It is the holding company for Gazprom Marketing & Trading (GM&T), which is a major player in European energy markets, as well as having significant footprints in LNG, in particular, but also in liquids markets. Its liquidation could have caused widespread disruption in those markets.
GM&T is the owner of the Gazprom Retail business, which has a material share of the UK’s industrial and commercial gas and power market. The UK government should therefore be grateful to its German counterpart for at least temporarily alleviating the threat of the disorderly exit of another large player from its supply markets, after a spate of bankruptcies due to lack of risk management of persistently high wholesale prices.
Security of supply
Other Gazprom Germania arms are substantial actors in northwest and central and eastern European gas markets. Its Wingas subsidiary is one of Germany’s largest midstream gas firms, buying volumes from producers such as Gazprom Export and selling it on to the country’s end-user suppliers. And it owns two-thirds of eastern Europe-focused gas trader Vemex.
Its Astora storage subsidiary operates one of the continent’s largest portfolios by capacity, including stakes in the 3.9bn m³ Rehden and 0.9bn m³ Jemgun sites in Germany and the 2.9bn m³ Haidach facility in Austria. Gazprom Germania also holds an almost 50pc share in Germany’s Gascade gas network, and it is these storage and pipeline assets that have given cause for the BMWK to act. Read More...
