Germany and Poland buy natural gas companies linked to Russia

Germany and Poland buy natural gas companies linked to Russia

BERLIN (AP) — Germany and Poland on Monday announced separate takeovers of natural gas companies linked to Russian energy giant Gazprom, saying the moves were aimed at securing supply as Europe grapples with an energy crisis related to the war in Ukraine.

Germany says it is nationalizing the former German subsidiary of Gazprom months after it was put under the control of a government agencyits last nationalization in the energy sector since the Russian invasion.

The government cited the indebtedness of the company, which has been renamed Securing Energy for Europe, and said it was taking steps to avoid the danger of bankruptcy and ensure it continues to operate. The Economy Ministry said SEFE, which is involved in trading, transporting and storing natural gas in Germany and neighboring countries, is “a key company for Germany’s energy supply”..”

The Polish government, meanwhile, said it had taken “temporary mandatory management” from Gazprom in the Yamal gas pipeline network on Polish territory. He said the takeover was necessary for the country’s energy security and to ensure smooth decision-making in a business vital to gas flows.

As European countries supported Ukraine, Russia cut natural gas supplies used to heat homes, generate electricity and power industry, creating an energy crisis that fuels inflation and forcing some factories to close that prices have increased.

Germany, a major importer of Russian gas before the war, received no gas from Russia since late August, when Poland was isolated in April.

Polish Development and Technology Minister Waldemar Buda said the takeover was necessary to ensure the proper functioning of gas pipeline company EuRoPol Gaz, owned by PAO Gazprom and Polish energy giant PKN Orlen.

After Poland sanctioned PAO Gazprom for the war in Ukraine, Buda said there was a ‘decision impasse’ at EuRoPol Gaz, with the Polish operator having ‘no partner’ with whom to decide on maintenance work required.

“We are doing everything possible to eliminate the effects of Russian aggression and to eliminate Russian capital and Russian influence,” Buda said.

In Germany, confusion over ownership and sanctions also played into the decision to nationalize a former Gazprom subsidiary.

In early April, the German government tasked its network regulator with what was then Gazprom Germania after an opaque decision by the former parent company to cut ties with the unit. The regulator was appointed trustee of the company, with the right to dismiss and appoint officers.

The company was then hit with sanctions from Russia as part of a tit-for-tat move for Western sanctions against Ukraine.

The German economy ministry said Russian sanctions put the company in a difficult financial situation and that business partners and banks had either severed their ties with it or refused to establish new ones due to the unclear ownership situation.

SEFE had already received 11.8 billion euros ($12.2 billion) in government loans to stabilize the business. This amount has now been increased to 13.8 billion euros.

The government is taking over SEFE through a capital reduction that removes previous shareholders, as well as an injection of some €225.6 million of new capital under the aegis of a state-owned holding company.

This is the latest nationalization of the energy sector by Germany. In September, the government said German authorities were taking control of three Russian-owned oil refineries to ensure energy security. Two subsidiaries of the Russian oil giant Rosneft were placed under the administration of the national network regulator.

Shortly thereafter, the government announced the nationalization of the country’s largest natural gas importer, Uniper.. The company’s losses had increased as Russia cut gas supplies.

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