BERLIN (Reuters) -Germany will put Gazprom Germania, the energy business abandoned by Russia’s Gazprom in April, under long-term administration and back it with a loan of around 10 billion euros ($10.4 billion) to help bolster the security of Europe’s energy supplies. The energy trading, storage and transmission business, which Gazprom ditched following Russia’s invasion of […]
BERLIN (Reuters) -Germany will put Gazprom Germania, the energy business abandoned by Russia’s Gazprom in April, under long-term administration and back it with a loan of around 10 billion euros ($10.4 billion) to help bolster the security of Europe’s energy supplies.
The energy trading, storage and transmission business, which Gazprom ditched following Russia’s invasion of Ukraine in February, will be renamed Securing Energy for Europe GmbH, the German government said in a statement
A government source said state investment bank KfW would support the company with a loan of between 9 and 10 billion euros designed to ensure the continuity of a business that is important for Europe’s energy supplies.
The new, long-term arrangement will allow administrators to focus on securing energy supplies. Under the previous, short-term agreement, administrators’ primary duty would have been to preserve the company’s capital for its original owner, the Russian state.
The importance of securing energy supplies was underscored earlier on Tuesday when Gazprom said it had curbed gas flow via the Nord Stream 1 undersea pipeline to Germany due to the delayed return of equipment that had been sent for repair.
Equipment supplier Siemens Energy said sanctions against Russia were making it impossible for it to return a turbine being maintained in Canada.
Before the Ukraine war, Germany relied on Russia for around half of its gas needs. It is still heavily dependent on Russian supplies, but is trying to wean itself off them.
German Finance Minister Christian Lindner said on Tuesday the state-guaranteed loans for Gazprom Germania would have no implications for the federal budget.
“They are just guarantees,” he said.
Gazprom Germania’s intertwined network of units includes trader Wingas and storage firm Astora, which operates 6 billion cubic metres of underground gas caverns in Germany and Austria.
UK arm Gazprom Marketing & Trading provides fuel to consumers including factories, restaurants and the National Health Service, which has caused concerns in Britain that could be alleviated by the German move.
($1 = 0.9606 euros)
(Reporting by Thomas Escritt in Berlin and Christian Kraemer in SofiaEditing by Miranda Murray and Mark Potter)
