Punitive measures against energy companies: Russia sanctions Gazprom Germania

Status: 05/12/2022 00:23

Russia has announced sanctions against 31 energy companies. A list published by the Kremlin also includes parts of the Gazprom Germania group, which is under the supervision of the Federal Network Agency.

Russia imposed sanctions on Gazprom Germania and other former subsidiaries of its state-owned gas company. With a total of 31 listed companies, no more business should be done on the Russian side, he said. The Russian government has issued an order that trade bans come into effect on behalf of Russian President Vladimir Putin.

The sanctions include a ban on transactions and entry into Russian ports for vessels associated with the companies concerned.

Gazprom Germania under trusteeship

Gazprom Germania was placed under the supervision of the Federal Network Agency at the beginning of April. The company owns other important companies in the German gas industry. These include gas trader Wingas, which provides utilities among other things, and gas storage operator Astora. They are also affected by Russian sanctions.

The sanctions also affect the Polish company Europol GAZ, owner of the Polish part of the Yamal-Europe gas pipeline. Russia had previously stopped supplying gas to Poland.

Uli Meerkamm, ARD Berlin, on Russia’s sanctions against 30 EU energy companies

daily topics 10:15 p.m., 11.5.2022

Federal government: security of supply guaranteed

The federal government has declared that security of supply is currently guaranteed. A spokeswoman for the Federal Ministry for Economic Affairs and Climate Protection said: “We are evaluating these announcements. We still do not have details.”

The federal government and the Federal Network Agency, as administrator of Gazprom Germania, are already preparing for various scenarios, he said. “The gas crisis team is closely monitoring the current situation. The security of supply is currently guaranteed and is constantly monitored,” the spokeswoman said.

Gas storage affected as a buffer system

According to the Russian agency Interfax, the constitution of stocks of Russian gas in European storages will be prohibited in the future. It was initially unclear how such a ban would be enforced. In Germany, there are 47 underground storage facilities at 33 sites operated by around 25 companies. Gas storage compensates for fluctuations in gas consumption and thus forms a kind of buffer system for the gas market.

Storage tanks are usually well filled at the start of the heating season in the fall, then levels drop in the spring. During cold winter days, up to 60% of gas consumption in Germany is covered by German storage facilities. According to the new storage law, they should be 90% full by November 1. As of Monday, storage tanks were nearly 39% full – and the trend is rising.

Germany’s largest storage operator is energy group Uniper, which accounts for around a quarter of Germany’s storage capacity. However, the largest storage facility is operated by Gazprom Germania subsidiary Astora, which is subject to the new sanctions.

The storage facility is located in Rehden in Lower Saxony. It represents about a fifth of German capacity. More recently, however, there has been virtually no gas stored at the Rehden storage facility, the fill level was 0.6% at the start of last week. The filling did not start again until the end of last week. “We are working intensively on supplying larger quantities of gas for this storage facility,” the Federal Network Agency said last Thursday (May 5). The objective is to reach an occupancy rate of 80% by October 1.

Announced Russian reaction

Affected companies in Germany, other EU countries, the United States and Britain were subject to Western sanctions during Russia’s war of aggression against Ukraine. At the beginning of April, Federal Economics Minister Robert Habeck temporarily appointed the Federal Network Agency as trustee of the German subsidiary of Russian state-owned company Gazprom after Russian parent company Gazprom relinquished the subsidiary.

Habeck justified this by unclear legal relationships and violation of reporting rules. The objective is to ensure security of supply.

The Kremlin had announced countermeasures. In early May, Putin issued an executive order prohibiting any Russian entity from doing business with companies and individuals on the sanctions list. No product or raw material can be exported to them. “Specifications should therefore be submitted within ten days”, specifies the Ministry of Economic Affairs.

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