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ENERGY

Germany takes temporary control of Gazprom subsidiary

Germany said Monday it was temporarily taking control of Russian gas giant Gazprom's German subsidiary to secure energy supply and critical infrastructure amid growing distrust between the trade partners in the wake of the Ukraine war.

Economy and Climate Minister Robert Habeck speaks at a press conference in Berlin on Monday.
Economy and Climate Minister Robert Habeck speaks at a press conference in Berlin on Monday. Photo: picture alliance/dpa | Michael Kappeler

Energy Minister Robert Habeck said the Bundesnetzagentur energy regulator would become the trustee of Gazprom Germania until September 30th.

“The government is doing what is necessary to ensure security of supplies in Germany, and that includes not exposing energy infrastructures in Germany to arbitrary decisions by the Kremlin,” Habeck said.

The move comes after state-owned Gazprom unexpectedly said it was withdrawing from Gazprom Germania last Friday, without disclosing a new ownership structure.

The German unit holds several key energy assets, including natural gas supplier Wingas, which has a market share of around 20 percent in Germany, gas storage firm Astora, a London-based trading arm and other foreign subsidiaries.

The German government made the decision to step in because of the current “unclear” legal structure behind Gazprom Germania and the mother firm’s failure to comply with the obligation to inform German authorities of ownership changes, the minister said.

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Under German law, the government has the right to examine transactions involving non-EU firms deemed systemically relevant.

Habeck said Gazprom Germania operates “critical infrastructure” in Europe’s biggest economy.

Under the interim arrangement, voting rights in Gazprom Germania will be transferred to the Bundesnetzagentur.

The energy regulator will also be allowed to dismiss management members and appoint new ones, as well as “take all necessary measures to guarantee supplies”, Habeck said.

Germany has backed sweeping Western sanctions against Moscow over its invasion of Ukraine.

But because of its heavy reliance on Russian energy imports, Berlin has so far resisted pressure to boycott Russian oil and gas.

Those calls have grown louder at home and abroad however following recent allegations of atrocities committed against civilians in the Ukrainian town of Bucha.

EU antitrust investigators last week raided the German offices of Gazprom, on suspicion the Russian state gas giant had illegally pushed up prices in Europe.

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ENERGY

Russia using energy ‘as weapon’, says Berlin

German Economy Minister Robert Habeck accused Russia on Thursday of using energy as "a weapon", after Moscow announced sanctions on Western energy firms and a key pipeline again saw lower gas deliveries to Europe.

Russia using energy 'as weapon', says Berlin

“It has to be said that the situation is coming to a head, in such a way that the use of energy as a weapon is now being realised in several areas,” Habeck told a press conference.

Ukrainian Foreign Minister Dmytro Kuleba, on a visit to the German capital, said Moscow had shown itself to be an unreliable supplier.

Kuleba urged Europe to end its heavy dependence on Russian gas that was helping to finance Moscow’s war machine.

“This energy oxygen for Russia must be turned off and that is especially important for Europe,” Kuleba said at a joint press conference with Habeck.

“Europe must get rid of this complete dependence on Russian gas, since Russia has shown… that it is not a reliable partner and Europe cannot afford that.”

Russia on Thursday said it would stop sending natural gas via the Polish section of the Yamal-Europe pipeline as part of retaliation for Western sanctions over its invasion of Ukraine.

The move comes a day after Russia issued a government decree imposing sanctions on 31 EU, US and Singaporean energy firms.

Most of the companies belong to the Gazprom Germania group of subsidiaries of Russian energy giant Gazprom.

The sanctions include a ban on transactions and the entry into Russian ports of vessels linked to the affected companies.

Meanwhile, operators on Thursday reported a drop in gas supplies from Russia via Ukraine for a second day, after Kyiv said it would suspend flows through a key eastern transit pipeline called Sokhranivka because the area wasno longer under Ukrainian control.

But Gazprom has denied there was a case for the Ukrainian side to declare “force majeure” and said it was impossible to reroute all the supplies through another Ukrainian pipeline.

‘Blackmail’ fears

Gazprom told the Interfax news agency that supplies transiting Ukraine on Thursday were at 50.6 million cubic metres in total, compared to 72 million cubic metres the day before.

Germany, which is hugely reliant on Russian energy, said it had been able to make up the shortfall through gas imports from Norway and the Netherlands.

The head of Germany’s Federal Network Agency, Klaus Mueller, also noted that Russia had been very “surgical” about its pick on which companies to sanction, selecting only storage and trading companies, and “not the operators”.

This “very well-planned, precise decree allows it to keep doing business with Germany, but not on old contract conditions”, rather under new conditions that other gas dealers would then have to conclude with Russia, said Mueller.

Europe’s biggest economy is racing to wean itself off Russian energy and has already almost completely phased out Russian coal.

But ditching Russian oil and gas will be more difficult.

With fears growing that Russia could abruptly turn off the energy taps, Habeck said Germany was focusing on building up gas reserves to prepare for winter.

“The gas storage facilities must be full by winter or else we will be in a situation where we can easily be blackmailed,” he warned.

READ ALSO: Russian gas transit halt in Ukraine hits key pipeline’s inflow in Germany

By Michelle FITZPATRICK

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