The German government has, effective immediately, transferred the ownership of the German Gazprom subsidiary to the federal network agency as a trustee in a bid to save the country’s gas market.
On Friday (1 April), Gazprom Germania found itself transferred to several different companies, the last of which ordered its immediate liquidation. This move sent German authorities into a panic with concerns over what it would mean for existing gas contracts. In an extraordinary action, the government intervened and handed the entity over to a federal agency as a trustee.
“The order of trusteeship serves to protect public safety and order and to maintain security of supply. This step is imperative,” explained Economics and Climate Protection Minister Robert Habeck.
The announcement came after multiple ministries in Berlin had worked through the weekend following a chain of events that saw the ownership rights to Gazprom Germania change hands numerous times.
For the security of supply, it is crucial “that we do not expose energy infrastructure in Germany to arbitrary decisions by the Kremlin,” Habeck said.
Gazprom Germania had been wholly owned by Gazprom Export LLC (GPE), after which the shares were transferred to Gazprom export business services LLC (GPEBS) on 25 March. The German government stated that it was “unclear” who owned the company.
Second, 0.1% of the GPEBS shares were transferred to a shell company Palmary, where the Germans noted that it was also “unclear who is economically and legally behind” the company. Gazprom then announced that it had divested itself of ownership of Gazprom Germania.
The news on 1 April that the company was ordered to file for “voluntary liquidation,” prompted frantic activity across the foreign and economy ministries to stop the move.
Should the executives at Gazprom Germania “carry out the procedure of the voluntary liquidation” as ordained, the long-term gas contract held by German companies with the German subsidiary as their partner was at risk.
These long-term contracts are highly lucrative, as they were agreed upon before the record spike in gas prices and are usually hedged against massive price swings to allow for stable business planning.
As per German law, any transfer of ownership in “critical” infrastructure requires the go-ahead of Habeck’s ministry, which was not given. Fearful of additional attempts to interfere with the subsidiary, the German government did something it had never done before.
“I’ve lived to see Germany nationalise Russian companies operating in Deutschland, what a time to be alive,” commented legal scholar Jakub Jaraczweski.
Gazprom Germania will be steered by the federal network agency until 30 September 2022, although the government has yet to comment on what will be done with the subsidiary of the Russian state company afterwards.
“The Federal Network Agency is aware of the responsibility for secure gas supply through the trusteeship for Gazprom Germania,” explained Klaus Müller, head of the agency.
Müller now holds massive sway over the company, including the ability to recall the company leadership and appoint and manage new leaders. As a trustee, Müller’s agency will also be able to sell Gazprom gas storage sites, like the largest facility in Rehden, at market prices, should the government desire.
The subsidiary plays a significant role beyond Germany as well. “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,” said Habeck.
Given the importance of the subsidiary to the governments in Czechia and Switzerland, it is not yet clear whether their governments had been consulted ahead of taking action.
“We want to conduct it [Gazprom Germania] in the German and European interest and comprehensively guarantee the security of supply,” Müller added.
Source: euractiv.com
