German gas firm VNG seeks government aid as energy prices soar
German gas company VNG has become the latest European energy firm to seek government aid as reduced Russian pipeline flows pushed up energy prices and put its business under stress.
VNG, Germany's third-largest gas importer and storage operator, asked on Friday for support to "avoid further damage" and to maintain the group's "ability to act", it said in a statement.
Russia has slowly dwindled supplies of gas to Europe in the wake of the invasion of Ukraine, sending prices for the fuel soaring.
Unfulfilled contracts meant "gas quantities had to be procured at significantly higher prices" to meet supply arrangements with customers at "significantly lower, contractually agreed prices", leading to a cash crunch, VNG said.
READ ALSO: When will effects of Russian gas turn-off be felt in Germany?
Further "stabilisation measures" were needed despite a government plan to allow gas companies to pass on some of their procurement costs to consumers with a so-called 'gas levy' from October 1st.
READ ALSO: Will energy companies profit from Germany’s gas levy on consumers?
VNG, which is majority owned by the German utility EnBW, in turn part-owned by the region of Baden-Württemberg, said it remained in "ongoing talks" with the federal government over rescue measures.
Uniper, Germany's biggest importer of Russian gas, asked for government support earlier this year under the pressure of rising gas prices.
Officials in Berlin agreed to take a 30 percent stake in the struggling company as part of a bailout greed in July.
But a €9 billion euro line of credit extended by Berlin to the company to secure its financial position had already been exhausted by late August, Uniper said.
Finland, Austria and Switzerland have also extended support to prop up energy firms.
READ ALSO: Russia halts gas supplies to Germany
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VNG, Germany's third-largest gas importer and storage operator, asked on Friday for support to "avoid further damage" and to maintain the group's "ability to act", it said in a statement.
Russia has slowly dwindled supplies of gas to Europe in the wake of the invasion of Ukraine, sending prices for the fuel soaring.
Unfulfilled contracts meant "gas quantities had to be procured at significantly higher prices" to meet supply arrangements with customers at "significantly lower, contractually agreed prices", leading to a cash crunch, VNG said.
READ ALSO: When will effects of Russian gas turn-off be felt in Germany?
Further "stabilisation measures" were needed despite a government plan to allow gas companies to pass on some of their procurement costs to consumers with a so-called 'gas levy' from October 1st.
READ ALSO: Will energy companies profit from Germany’s gas levy on consumers?
VNG, which is majority owned by the German utility EnBW, in turn part-owned by the region of Baden-Württemberg, said it remained in "ongoing talks" with the federal government over rescue measures.
Uniper, Germany's biggest importer of Russian gas, asked for government support earlier this year under the pressure of rising gas prices.
Officials in Berlin agreed to take a 30 percent stake in the struggling company as part of a bailout greed in July.
But a €9 billion euro line of credit extended by Berlin to the company to secure its financial position had already been exhausted by late August, Uniper said.
Finland, Austria and Switzerland have also extended support to prop up energy firms.
READ ALSO: Russia halts gas supplies to Germany
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