German regulator buys Gazprom Germania to ensure energy supply

Gazprom company logo is seen on the facade of a business center in Saint Petersburg, Russia, March 31, 2022. REUTERS/REUTERS PHOTOGRAPHER/

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FRANKFURT, April 4 (Reuters) – Gazprom Germania, an energy trading, storage and transmission company abandoned on Friday by Russian Gazprom (GAZP.MM), will be transferred to the German regulator to ensure energy security, said Economy Minister Robert Habeck on Monday.

All of the company’s voting rights will be transferred to the regulator, the Bundesnetzagentur, Habeck told a news conference. The motion was immediately put into effect by publication in the Federal Gazette.

“The trust administration order serves to protect public safety and order and to maintain security of supply,” Habeck said. “This step is mandatory.”

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Habeck added that security of supply was currently guaranteed at a time of crisis in energy ties between Germany and Russia following Russia’s February 24 invasion of Ukraine.

The Bundesnetzagentur will take control until September 30, 2022. It will have the right to dismiss executives, hire new employees and ask management how to proceed.

“Our goal will be to lead Gazprom Germania in the interests of Germany and Europe,” Klaus Mueller, head of the Bundesnetzagentur, said in a statement.

The economy ministry said the move was aimed at avoiding a possible acquisition of Gazprom Germania by JSC Palmary and Gazprom export business services LLC, both Russians.

It was unclear who was behind the companies, the ministry said, implying that an acquisition was not legally permitted, given that the investors were from outside the EU and were about to operate critical infrastructure.

“We will not leave energy infrastructure subject to arbitrary Kremlin decisions,” Habeck said.

Gazprom gave no details or explanation of its decision to end its stake in Gazprom Germania and all of its assets, which include subsidiaries in Britain, Switzerland and the Czech Republic. Read more

Gazprom has been in the crosshairs of European Union regulators for months over allegations, which it has denied, that it was withholding gas that could have been released to drive down prices.

Sources said last week that its offices in Germany had been raided by EU antitrust authorities. Read more

German Finance Minister Christian Lindner on Monday rejected an EU embargo on Russian gas imports as rising civilian deaths in Ukraine increase pressure on the bloc to impose sanctions on Russia’s energy sector. Read more

“We are dealing with a criminal war,” Lindner said ahead of talks with EU colleagues in Brussels. “It is clear that we must end all economic ties with Russia as quickly as possible. We must provide for severe sanctions, but the gas cannot be replaced in the short term. We would inflict more damage on ourselves than on them.”

Habeck said earlier on Monday that he was seeking to reduce Russia’s indirect economic influence over other parts of the energy industry, saying the next in sight was a bid from Russian incumbent Rosneft (ROSN .MM) to control the German refinery PCK Schwedt.

Gazprom Germania’s network of intertwined units includes trader Wingas and storage company Astora which operates 6 billion cubic meters of underground gas caverns in Germany and Austria.

Britain’s Gazprom Marketing & Trading arm supplies fuel to consumers including postmen, restaurants and the National Health Service, which has caused widespread concern in Britain and pressure would be put on these companies under the German decision.

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Reporting by Vera Eckert and Joseph Nasr; additional reporting by Kate Holton in London, editing by Maria Sheahan and David Evans

Our standards: The Thomson Reuters Trust Principles.

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