Gazprom Germania
The German government is preparing money to save Gazprom Germania, a former Gazprom subsidiary. The company is under the control of the German government. At the moment, the German government has already allocated a certain amount and a loan of 5-10 billion euros in financial aid will soon be approved. The loan will be provided by the state bank KfW Group.
The money will be used to stabilize the company’s operations. The German Finance Ministry declined to comment, but it is known that the state energy regulator has said that employees are working to maintain business operations.
Gazprom Germania is the company that operates the underground gas storage facilities in Germany and owns several storage facilities. It is the largest gas company in the country. The company also owns assets and issues shares, and supplies gas to industrial German companies. It is also well-positioned at the heart of European energy markets. It has a business that provides one fifth of the UK’s commercial gas in 2020, a trading desk in London and a liquefied natural gas business.
In essence, it is a branch of Gazprom in Europe. But in early April, following the imposition of sanctions, Gazprom announced that it no longer controls its German subsidiary and the assets of this company, i.e. it is effectively ceasing to participate in the life of Gazprom Germania. In turn, the German authorities have transferred Gazprom Germania to the custody of the Federal Network Agency until September 30. Until the same date, a license from the U.S. Ministry of Finance, which allows for transactions with the company, is in effect. That’s why German authorities are trying so hard to resuscitate the company.
The final sum for the aid to Gazprom Germania will most likely still amount to 10 million euros, as funds are needed to pay salaries to employees, save and maintain work processes, and transport gas. The final sum is still being negotiated, however. The funds will help stabilize the company’s financial situation and ensure supply security after Gazprom subsidiaries in Germany stopped receiving gas from Russia. As a result, Gazprom Germania was forced to buy energy at higher prices. At the moment German authorities are deciding how to deal with the subsidiaries of the Russian business. One of the options is trust management and taking the companies under the control of energy companies. Chancellor Olaf Scholz’s administration has thought through the process and has created instruments for financing if gas supplies to the country are threatened. We are talking about loans and buying stakes in the company to bail it out. It is not yet clear how long Germany will run the company and so far its fate is unknown.
