Daily Times

Germany announced on Monday it was nationalising a former subsidiary of Russian energy giant Gazprom, saying it was necessary because of the company’s systemic importance for power supplies in the country. The company, Securing Energy for Europe GmbH (SEFE), was previously known as Gazprom Germania.It is a network operator and indirectly controls Germany’s largest gas storage facility in the northwestern town of Rehden. In the wake of Russia’s invasion of Ukraine and Moscow’s decision to reduce energy supplies to Europe, Berlin placed the SEFE under its effective control in April. But ownership of the company had remained unclear. As a result, business partners and banks have suspended business relations with SEFE or are reluctant to enter into new ones, the economy ministry said. “This jeopardises the continuation of SEFE’s business operations and thus the gas supply,” it added.

Germany was therefore formerly nationalising the company and turning it into a state asset. Under complex accounting manoeuvres, the company’s losses are offset against its capital reserves. As a result, Gazprom loses its shareholding in the company, the economy ministry said. In turn, Germany will plough 225 million euros ($232 million) into the company, thereby taking over as “sole new shareholder”. “This completes the change of ownership,” the ministry said. Germany also plans to offer the company a loan of 13.8 billion euros in a debt-equity swap arrangement by the end of the year, although the measure is still under discussion.

Once heavily reliant on Russian energy, Berlin has been racing to wean itself off imports of gas and oil from the country. Meanwhile, the government in Warsawsaid on Monday it was seizing Gazprom’s share in EuRoPol Gaz, the company that owns the section of the Yamal-Europe natural gas pipeline that runs through Poland. The move was designed to “ensure the security of (Poland’s) critical infrastructure”, the development ministry said. The Russian gas giant had a 48-percent stake in EuRoPol Gaz and the Polish state the remaining 52 percent.Gazprom completely halted gas supplies via the pipeline in April.