Page 13 - FSUOGM Week 20 2022

FSUOGM POLICY FSUOGM

Russia counter-sanctions Gazprom’s former

foreign units, including Gazprom Germania

GERMANY THE Russian government has adopted a list of had selectively excluded gas transmission grid
counter-sanctioned foreign entities, including a operators. “This is a very precise decree to be
Gazprom Germania is number of former subsidiaries of Russia’s state able to keep doing business with Germany,” he
the main umbrella for natural gas giant Gazprom, according to the said, but probably with new contracts and at new
Gazprom's overseas announcement on the official legal information prices.
operations. portal. The counter-sanctions are also likely to push
As followed by bne IntelliNews, a number of the German government closer to full nation-
Gazprom’s trading and operational branches in alisation of Gazprom Germania. Economy and
the US and the EU were sanctioned and blocked Climate Minister Robert Habeck said that the
by their respective host governments follow- German government would be empowered
ing Russia’s military invasion of Ukraine. Now to “expropriate as an ultimate ratio” in case the
Russian entities are forbidden from dealing operators of critical infrastructure “can no longer
with these companies or from investing in their adequately meet” their obligations, as cited by
securities. Euroactiv.
These include Gazprom Germania GmbH “The German government and the Federal
and Gazprom Marketing & Trading Ltd and 29 Network Agency as trustee of Gazprom Germa-
Gazprom Germania subsidiaries in Switzerland, nia are therefore already in the process of making
Hungary, the UK, France, Bulgaria, the Bene- the necessary precautions and are preparing for
lux countries, the US, Romania and Singapore. various scenarios,” a spokesperson of the minis-
German regulators seized operational control try said on May 11.
of Gazprom Germania, which serves as an European gas prices soared after Russia
umbrella for many of Gazprom’s other European announced its sanctions, with the TTF June con-
and international subsidiaries, in early April. But tract climbing 15% to €115 ($120)/MWh during
days earlier, Gazprom reported that it had termi- morning trading on May 11, amid fears that the
nated its participation in the business, without measures might make Russian gas supply con-
disclosing who the new owner was. tracts null and avoid.
Polish EuRoPol GAZ, which owns and oper- "The chances of this happening are slim, but
ates the Polish part of the Yamal-Europe gas not zero and will hasten Europe's scramble to
pipeline, is also sanctioned. That pipeline is now arrange for additional LNG, speed up plans
far less utilised, after Russia halted gas supply to for a buyer's alliance and potentially consider
Poland on April 27 following Warsaw’s refusal to demand side measures such as gas rationing,"
have its payments for gas converted into rubles Rystad Energy analyst Kaushal Ramesh said
under a Kremlin decree. in a research note. "There is historical prece-
Gazprom Germania owns multiple key com- dent for Gazprom stopping gas flows as they
panies in the German gas markets, including gas did several times between 2005-2014 and the
trader Wingas and the storage facility operator ongoing tensions between the Gas TSO of
Astora, which owns the largest German gas stor- Ukraine and Gazprom are setting the scene for
age facility, in Rehden. According to the Russian a repeat."
news agency Interfax, the sanctions would also The upside is that European gas storage levels
prohibit the long-term storage of Russian gas in are sufficient to last through most of 2022 even
Germany ahead of the coming winter season. Russian supply is halted barring any unexpected
“This is a surgical decree,” head of the Ger- weather events, Ramesh said, "but the outlook
man federal network agency Klaus Müller com- for winter 2022 supply is now a lot more pessi-
mented, noting that the Russian government mistic." ™

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