German VNG asks government for help to cover losses

MOSCOW, 9 Sep — PRIME. The German gas company VNG has asked the German government for help to cover the losses, according to a company press release.

“In order to prevent further losses to VNG and to continue the activities of the VNG group as a whole, VNG considers itself forced to apply for additional support measures under the Energy Supply Security Law in addition to the “gas surcharge” (according to Article 26 of the Law) that has already been applied”, – the message says.

The company explains that gas shortfall due to interruptions in supplies from Russia now has to be purchased on the spot market, and as a result, due to unfulfilled previous obligations of suppliers, it buys “blue fuel” at significantly higher current market prices, while according to the contracts, it must supply its customers at significantly lower tariffs.

The release clarifies that VNG has two contracts that were affected by such interruptions in supplies from Russia: a direct contract until the end of the year for the supply of approximately 35 TWh of gas per year from Gazprom Export and a contract for the purchase of 65 TWh of gas per year with a German supplier who imports this volume.

VNG also expects to be able to use its own funds and additional stabilization measures to cover losses, which, according to their calculations, will amount to about 1 billion euros by the end of the year. A spokesman for the German Economics Ministry confirmed to Reuters that the request had been received. At the same time, German media wrote earlier that the German authorities want to provide the company with guarantees of up to 2 billion euros in case of problems.

VNG operates in the gas and gas infrastructure sector and has 20 subsidiaries in Germany and Europe. The staff is about 1.5 thousand people. The headquarters is in Leipzig.