Status: 01/04/2022 18:34
While the economy is still grappling with the fallout from the ruble decree, the next turning point in the gas dispute with Russia is just around the corner: State-owned Gazprom is splitting off its German subsidiary and its holdings.
Russian state-owned Gazprom surprisingly split from its German subsidiary Gazprom Germania. “On March 31, the Gazprom Group ended its participation in the German company Gazprom Germania GmbH and all its assets, including Gazprom Marketing & Trading Ltd,” the group announced on its Telegram channel. No additional details were given. Gazprom Germania initially did not comment.
According to its own statements, Berlin-based Gazprom Germania GmbH is a 100% subsidiary of the Russian energy group Gazprom. Gazprom Germania, in turn, owns other companies in the German gas sector. These include trading companies Wingas and WIEH, gas storage operator Astora, which operates Germany’s largest gas storage facility in Rehden, and a minority stake in gas transport company Gascade.
40% gas supply by Gazprom
With a share of almost 40%, the world’s largest natural gas production company, Gazprom, plays a key role in Germany’s gas supply. EU Commission investigators were already known to have sought out several companies in Germany – including Gazprom Germania – after allegations against the parent company.
There are fears that the companies may have abused their dominant position in the market, said the Brussels official responsible for enforcing EU competition law. These are companies that do business with pipelines or with the delivery or storage of natural gas.
Gazprom’s German subsidiary as a pawn sacrifice?
One can only speculate about the strategy behind the sale of Gazprom Germania, said gas market expert Fabian Huneke of the dpa news agency’s Energy Brainpool consultancy. “The physical assets (gas storage, pipelines) that will be lost with the sale of Gazprom Germania from a Russian point of view could be the pawn sacrifice to renegotiate the gas supply contracts.” Because Gazprom Germania holds the majority of import contracts through its two subsidiaries Wingas and WIEH.
According to Huneke, existing import contracts still bind Gazprom Export to currency, price and volume. “This contractual obligation can now be lifted, for example, through the insolvency vehicle of Gazprom Germania and its subsidiaries involved in the gas trade.”
Gas payments in rubles
According to the Russian statement, Western countries such as Germany must now open accounts with Gazprombank to continue receiving gas. Otherwise, deliveries to “hostile countries” would be halted, Russian President Vladimir Putin announced.
States must therefore ensure payment in Russian currency through accounts that have an area for currencies – i.e. euros or US dollars – and another for rubles. Euros or US Dollars can still be deposited into the Russian account. Gazprombank exchanges the money for rubles and transfers the amount to Gazprom.
Economy warns of stoppage of gas supply
In the German economy, there are still great fears that the Federal Republic could plunge into a serious crisis in the event of a delivery stop. BASF CEO Martin Brudermüller has warned of unprecedented economic damage in the event of an import stoppage or a long-term failure of Russian gas and oil supplies. “This could push the German economy into its worst crisis since the end of the Second World War,” Brudermüller said of “the Frankfurter Allgemeine’s Sunday newspaper.”
Construction and energy expert Lamia Messari-Becker, who advises the federal government, has warned of the devastating consequences of an interruption in Russian gas supplies. “If the basic materials industries stopped, there would be a ripple effect that would be unstoppable and difficult to repair,” she told DPA.
Siemens Energy boss Christian Bruch told Handelsblatt that a short-term boycott would have a greater negative impact on Germany than Russia. For some industries, gas supply is existential, he said with a view to the glass industry, for example.
Expropriation of Russian companies?
The Federal Ministry of Economy had previously announced the early warning level of the gas emergency plan – the first of three levels. This is intended to reinforce the provision for a delivery stop. The appeal was to consumers and businesses to save energy.
Several scenarios had apparently already been played out internally at the Ministry of Economic Affairs in case the German subsidiaries of Russian state-owned companies Gazprom and Rosneft got into trouble. Among other things, it is about nationalization and expropriation, reports “Handelsblatt”, citing government officials.
The consequences of the immediate abandonment of Gazprom Germania and its participation in the supply of gas to Germany were initially unclear. According to the Federal Network Agency, gas supplies in Germany are stable.
Gas dispute with Russia – unacceptable blackmail
Kai Küstner, ARD Berlin, 1 April 2022 7:10 am