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April 4, 2022

Russian energy giant Gazprom withdraws from German business

The Russian firm has exited from Gazprom Germania, and its assets in the UK, Switzerland, and the Czech Republic.

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Russian majority state-owned energy firm Gazprom has exited its German subsidiary, Gazprom Germania, amid strained energy ties between the countries in the wake of Moscow’s invasion of Ukraine, reported Reuters.

The Russian firm has terminated its participation in Gazprom Germania and all of its assets, including subsidiaries in Britain, Switzerland, and the Czech Republic, without providing details of new ownership structure, according to Bloomberg News.

Gazprom Germania, which operates large gas storage facilities, is a 100% subsidiary of Gazprom and a 100% owned Gazprom Export.

European assets under Gazprom Germania include London-based Gazprom Marketing & Trading, Germany-based traders WIEH and Wingas, Switzerland-based Gazprom Schweiz, and storage operator Astora.

Gazprom Marketing & Trading said it “fully recognises the material impact” it could have in the European and the UK energy markets.

“We are therefore steadfastly committed to mitigating any adverse impacts, working very closely at present with the UK energy regulator (‘Ofgem’) and other UK government agencies to manage these risks.”

Details as to whether the someone would be appointed by the German government to run these assets to meet the required filling levels were unclear.

The latest move comes a day after the signing of a decree by Russian President Vladimir Putin to impose gas pricing on buyers in roubles from its ‘unfriendly countries’.

The ruling, however, has been rejected by Germany as its current contracts with the country are set in euros.

Last week, German business daily Handelsblatt reported that Germany is looking to nationalise the German subsidiaries of Russian firms Gazprom and Rosneft, to address concerns over its energy supply security.

The move is part of the country’s strategy to reduce its dependence on Russian energy.

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