Wednesday, July 6

Germany prepares 5-10-bln-euro rescue for Gazprom Germania – Bloomberg News


Article content

FRANKFURT — The Berlin government is preparing a bailout package in the range of 5 to 10 billion euros ($5.22-$10.44 billion) for Gazprom Germania, an energy company abandoned by Russia’s Gazprom and moved under trusteeship of the Germany regulator, Bloomberg News reported on Monday , citing sources familiar with the matter.

The rescue move could come as early as this week, with state-owned KfW bank acting as lender, but talks were ongoing and the plans could change, the report said.

Article content

The company, which acts across a number of countries but focuses its trading, storage and transmission activities on Germany, continental Europe’s biggest gas market, needs a financial boost to ensure it can uphold a crucial role in the region’s gas market.

At the heart of its problems, apart from having to retain customers, business partners and smooth operations, are sky-high purchasing costs of prompt gas.

Gazprom Germania has to buy some gas in spot markets for parts of its contractual obligations it has to honor after Gazprom quit its gas business in Germany outside mere export activities to Germany, which continue, although at lower levels than in past decades.

Asked about the Bloomberg report by Reuters, a spokesman for the energy regulator, the Bundesnetzagentur authority in Bonn said: “We do not participate in speculation.”

He said everyone at the authority has been working intensively to ensure that business operations at Gazprom Germania are continuing since the regulator stepped in on April 4.

Spot market prices of gas in Germany are three times their level of a year ago.

This results from a combination of a sharp global demand recovery and dwindling supplies out of Russia already from last autumn, which preceded disruptions seen since the Kremlin’s invasion of its southern neighbor Ukraine in February.

($1 = 0.9577 euros)

(Reporting by Christoph Steitz, writing by Vera Eckert, Editing by Bernadette Baum)



financialpost.com

Leave a Reply

Your email address will not be published.