Berlin nationalizes Gazprom Germania to block liquidation – EURACTIV.com
The German government has, with immediate effect, transferred ownership of the German subsidiary of Gazprom to the Federal Network Agency as a trustee in a bid to save the country’s gas market.
On Friday April 1, Gazprom Germania found itself transferred to several different companies, the last of which ordered its immediate liquidation. The move sent German authorities into a panic over what it would mean for existing gas contracts. In an extraordinary action, the government stepped in and handed over the entity to a federal agency as trustee.
“The guardianship order serves to protect public safety and order and to maintain security of supply. This step is imperative,” explained Minister of Economics and Climate Protection Robert Habeck.
The announcement came after several ministries in Berlin worked over the weekend following a series of events which saw the ownership rights of Gazprom Germania change hands several times.
For the security of supply, it is crucial “that we do not expose the energy infrastructure in Germany to arbitrary decisions by the Kremlin”, Habeck said.
Gazprom Germania was 100% owned by Gazprom Export LLC (GPE), after which the shares were transferred to Gazprom export business services LLC (GPEBS) on March 25. The German government said it was “unclear” who owned the company.
Second, 0.1% of GPEBS shares were transferred to a front company Palmary, where the Germans noted that it was also not “clear who is economically and legally behind” the company. Gazprom then announced that it had divested itself of ownership of Gazprom Germania.
News on April 1 that the company had been ordered to file for “voluntary liquidation” sparked rampant activity in the foreign and economy ministries to stop the movement.
If the leaders of Gazprom Germania “carried out the voluntary liquidation procedure” as planned, the long-term gas contract held by the German companies with the German subsidiary as a partner was in danger.
These long-term contracts are very lucrative because they were made before the record high gas prices and are usually hedged against massive price swings to allow for stable business planning.
In accordance with German law, any transfer of ownership in a “critical” infrastructure requires the green light from the Habeck ministry, which has not been given. Fearing further attempts to interfere in the subsidiary, the German government did something it had never done before.
“I lived to see Germany nationalize Russian companies operating in Deutschland, what a time to live”, commented jurist Jakub Jaraczweski.
Gazprom Germania will be piloted by the federal network agency until September 30, 2022, although the government has yet to comment on what will be done with the Russian state-owned subsidiary after that.
“The Federal Network Agency is aware of the responsibility for the security of gas supply through the supervision of Gazprom Germania”, explained Klaus Müller, director of the agency.
Müller now wields considerable influence over the company, including the ability to recall company management and appoint and manage new leaders. As a trustee, Müller’s agency will also be able to sell Gazprom’s gas storage sites, such as the largest facility in Rehden, at market prices, if the government so chooses.
The subsidiary also plays an important role beyond Germany. “Gazprom Germania is also active in other European countries, such as the Czech Republic and Switzerland, and plays an important role in their gas supply,” Habeck said.
Given the subsidiary’s importance to the Czech and Swiss governments, it is not yet clear whether their governments were consulted before taking action.
“We want to lead it [Gazprom Germania] in the interests of Germany and Europe and to ensure security of supply globally,” added Müller.