The model of the fuel pump is seen in front of the Gazprom logo in this photo taken on March 25, 2022. REUTERS/Dado Ruvic/Illustration
LONDON, April 1 – Russia’s Gazprom (GAZP.MM) said on Friday it is ceasing operations in Germany at a moment of crisis in vital energy ties between the two countries following Russia’s invasion of Ukraine.
The gas giant gave no details or explanations on its decision to end its stake in Gazprom Germania GMBH and all of its assets, which include subsidiaries in the UK, Switzerland and the Czech Republic.
Gazprom has been under the scrutiny of European Union regulators for months over allegations, which it denied, that it is holding back gas that could have been released to slash soaring prices. Sources said this week that their offices in Germany have been raided by EU antitrust authorities. Continue reading
“I think that means that Gazprom is raising a curtain to be an active participant in the European gas market. Essentially, it’s going home because it no longer feels welcome,” said Katja Yafimava, senior research fellow at the Oxford Institute for Energy Studies.
“I think Gazprom understands that it faces a hostile political and regulatory environment in Europe and therefore wants to consolidate and conduct all its operations in one place – St. Petersburg, most likely with the political support of the Russian government.”
Yafimava said she does not expect any impact on Russian gas supplies under long-term contracts. A market source in Germany with knowledge of the Russian gas business agreed with this assessment.
He said the main impact would affect gas storage, as Astora, a subsidiary of Gazprom Germania, has facilities with a combined capacity of 6 billion cubic meters in Germany and Austria.
It’s unclear if the federal government would step in and hire someone to operate these to reach the desired levels and if doing so could trigger legal opposition from Gazprom, the source said. Astora did not immediately respond to a request for comment.
The move further complicates energy ties between Russia and Germany, a day after Russian President Vladimir Putin signed a decree to impose ruble prices on gas on buyers from countries Moscow deems unfriendly.
Berlin opposes the change as existing contracts will be in euros and its economy minister said on Thursday it would not “let Putin blackmail it”.
Germany depends on Russian gas for about 40% of its needs, but has joined Western sanctions against Moscow over Ukraine, including by shutting down the Nord Stream 2 Baltic Sea gas pipeline, which aims to double the flow of Russian gas directly to Germany.
German business daily Handelsblatt reported on Thursday that Germany’s economy ministry is considering expropriating Gazprom and Rosneft (ROSN.MM) units in the country amid concerns over energy security. Continue reading
The Kremlin said on Friday that such a move would violate international law.
Additional reporting by Vera Eckert and Christoph Steitz, writing by Mark Trevelyan, editing by William Maclean