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This doesn't make sense to me. Can i get an explanation? The German state seized a local German branch of the Russian Gazprom company. In order to secure its e

This doesn't make sense to me. Can i get an explanation? The German state seized a local German branch of the Russian Gazprom company. In order to secure its energy supplies... which come from Russia. Are they in essence capturing some reserves?

johannes1234321 5y ago
That company owned pipelines and storage tanks within Germany, thus controls the flow of gas after reaching Germany.
- nbadg 5y ago
  To expand on this: much of the distribution infrastructure within Germany is owned by Gazprom. For example, there's a very large natural gas storage capacity within Germany, but a significant portion of that is owned by, you guessed it, Gazprom. There's broad consensus that, if all of the storage infrastructure were topped up, Germany would be able to make it through _next_ winter reasonably well, even if Russia stopped delivering gas. However, currently the storage capacity is at around 30%, which is insufficient. This move would imply that the German government is taking action to force the distribution infrastructure to be more resilient against the contingency that Russia (through one means or another) stops delivering gas. It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance. If you're interested in more and understand German, I'd recommend the most recent episode of Lage der Nation, which talks about this at much more length: https://lagedernation.org/podcast/ldn284-ukraine-krieg-6-woche-landtagswahl-saarland-vorbereitung-auf-gas-stopp-zweites-energiepreishilfspaket-waermepumpen-interview-franco-dubbers-corona-massnahmen-enden-impfpflicht-mens/ https://lagedernation.org/podcast/ldn284-ukraine-krieg-6-woc...
  - mschuster91 5y ago
    > It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance. It's a bit more complex than that. Following the liberalization of the gas market, "discount providers" appeared who simply bought on the spot market because that is usually drastically cheaper than long-term contracts, and also the large utilities shifted parts of their purchase to spot market contracts for the same reason. For many years this worked just fine from an outside POV, and the margins on the retail gas price that the utilities made were usually large enough to account for short-term supply price hikes without having to raise new capital or retail prices. All seemed to be well. Last year, people noticed that Gazprom's storage facilities were unusually low. Gazprom of course denied any wrongdoing, they claimed they are fulfilling their contractual obligations and that's it. Which is objectively true and as a result, no regulatory agency had any legal authority to step in. And now, with the invasion ongoing (and for a few months prior), Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out. The responsibility for the current situation rests to a large part on the utilities who forewent resilience (in form of more expensive long running contracts) in favor of short term profits. We dug our own and the Ukrainian's graves at the same time.
    - fuoqi 5y ago
      >Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out. What do you expect to happen when long-term contracts get tied to spot prices? Why the hell would Gazprom willingly lower the spot prices when bulk of its sales will suffer from it?
baq 5y ago
there's been talk of gazprom being a safe haven for higher placed people running from russia's recently tightened regime. think officials and/or FSB agents, etc. wanting to avoid sanctions by changing ownership structure of gazprom to western shell companies.
nieksand 5y ago
Here is the German explanation of what happened: https://www-sueddeutsche-de.translate.goog/wirtschaft/erdgas-energieversorgung-russland-ukraine-gazprom-sanktionen-bundesnetzagentur-1.5560838?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=de https://www-sueddeutsche-de.translate.goog/wirtschaft/erdgas...
ls15 5y ago
From another article: https://www.reuters.com/business/energy/germany-approves-law-mandating-full-gas-storage-before-winter-2022-03-25/ https://www.reuters.com/business/energy/germany-approves-law... > In Germany, a third of gas storage belongs to Russia's Gazprom (GAZP.MM), whose facilities in Germany had lower levels of stored gas this winter than those operated by other companies. In my opinion, Gazprom did so (last year) in order to strategically weaken Germany's position and strenghten Russia's position, by reducing the amount of gas that is stored in Germany.
ce4 5y ago
Apparently the company was sold or ownership restructured in march without prior notification of the regulatory body. The new owner is Gazprom Export LLC, of which ownership is unclear - it is suspected that Gazprom tries/tried to evade regulatory control over critical german infrastructure, thats why Minister Habeck has transferred control over to the Bundesnetzagentur as a trustee. Edit: Source (paywalled, german) https://www.spiegel.de/wirtschaft/gazprom-germania-hat-bereits-einen-neuen-eigentuemer-a-706607c7-55f8-4e0c-a4f6-2bbcf4dfbb65 https://www.spiegel.de/wirtschaft/gazprom-germania-hat-berei...
beberlei 5y ago
Gazprom attenpted to change owners and default the company. In that case the gas contracts would have been void including its negotiated prices (under currebt market value) and the currency in euro instead of rubbels.
- diskapital 5y ago
  > Gazprom attenpted to change owners and default the company. Is that illegal? I wonder about rule of law. We talk about this as sacrosanct here in the "West". It is funny that when push comes to shove (in my perception at least), we're quick to break the rules to get the outcome we want. When say a 3rd world country does something like this in response to a "Western" multinational's actions (perhaps a controversial example would be Mossadegh nationalizing APOC), then the response we take it is pretty severe (often involving significant amounts of violence) and we portray ourselves as being "morally" rightous, often with the very same "rule of law" claim. Just something I like to think about in this scenario. Not trying to push any agenda.
  - rfrey 5y ago
    You ask a question, then immediately assume the answer and draw conclusions based on that answer. I dispute that this is just something you like to think about ("Just asking questions here...") or that you are not pushing an agenda.
    - diskapital 5y ago
      I beg forgiveness if my question and thoughts on the matter are somehow perceived as an agenda. I haven't studied the Gazprom case carefully, but after all, the title of OP's article is "Germany has seized control of Gazprom", not Germany has lawfully taken over management of Gazprom assets after a protracted court case establishing ownership and takeover processes, so am I really at fault for drawing conclusions based on that?
      - rfrey 5y ago
        Perhaps I was too harsh, and you are not a native English speaker? "Seize" simply means to take control. The second definition in Miriam Webster is "to take control by legal means". Police seize drugs, for example.
cf141q5325 5y ago
I read a great reader comment on the topic (also in German so try DeepL) https://blog.fefe.de/?ts=9cb54d35 https://blog.fefe.de/?ts=9cb54d35 Its a political push and pull about who defaults on the existing contracts on gas import, seeing as Russia wants to be payed in ruble now, while Germany would prefer the payments to be stuck on a EU bank account as a form of reparation payments to the Ukraine. To prevent this outcome, Russia in effect might be liquidating the Gazprom Germania. With Gazprom Germania being the ones doing the actual importing. Over the last weekend there was a change in ownership of the Gazprom Germania to new unknown owners. So they might be already bankrupt. To prevent this, Germany is now seizing control of Gazprom Germania and might be on the hook to prevent an insolvency to not default on the contracts with Russia. In short, the German government fucked up majorly. edit: Check "throwhow"s post in this thread for a longer summary
- mkoryak 5y ago
  I am curious, why is this being downvoted?
  - gumby 5y ago
    Because ultimately it makes a strong assertion that the German government fucked up without supporting it. There’s nothing wrong with saying the government fucked up (though I don’t think it did). But the non sequitur opinion doesn’t add to the discussion.
    - cf141q5325 5y ago
      Its the summary of the commentary. I dont think you can justify not mentioning that bias.
- the_mitsuhiko 5y ago
  That comment is way to emotional to give it more than a few minutes of thought. It mixes facts with an unnecessary reaching commentary.
  - 5y ago
kkfx 5y ago
Gazprom formally cease it's activity in Germany, and it's German branch operate North Stream gas terminals. "seized" is a bad term to say "the State substitute the local management to ensure terminals operations to been able to buy the gas they need. If you really look for "sanctions" you'll see that there are some, but not really touching the energy sector since there is so far no viable alternative.
dathinab 5y ago
> Are they in essence capturing some reserves? No, sized here means "put under control of a trustee until the situation is resolved" it doesn't mean "take over ownership". The reason that happens is because the persons(s) currently in control of Gazprom Germania did try to use that control to act against German law in a way which threatens national security. This is also more about Gas infrastructure then Gas as far as I can tell. My guess is that some Russian oligarch tried to move ownership to one (or potentially many) chains of "dummy" companies which obfuscate the actual owner and go through many other non-Russian nationalities. This e.g. would make many legal actions against Gazprom Germania harder as the new (dumy) "owner(s)" would not be from Russia or any other sanctioned state.
- kmlx 5y ago
  > would make many legal actions against Gazprom Germania harder what legal action? Gazprom is not under any sanctions…

johannes1234321 5y ago

That company owned pipelines and storage tanks within Germany, thus controls the flow of gas after reaching Germany.

nbadg 5y ago
To expand on this: much of the distribution infrastructure within Germany is owned by Gazprom. For example, there's a very large natural gas storage capacity within Germany, but a significant portion of that is owned by, you guessed it, Gazprom. There's broad consensus that, if all of the storage infrastructure were topped up, Germany would be able to make it through _next_ winter reasonably well, even if Russia stopped delivering gas. However, currently the storage capacity is at around 30%, which is insufficient. This move would imply that the German government is taking action to force the distribution infrastructure to be more resilient against the contingency that Russia (through one means or another) stops delivering gas. It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance. If you're interested in more and understand German, I'd recommend the most recent episode of Lage der Nation, which talks about this at much more length: https://lagedernation.org/podcast/ldn284-ukraine-krieg-6-woche-landtagswahl-saarland-vorbereitung-auf-gas-stopp-zweites-energiepreishilfspaket-waermepumpen-interview-franco-dubbers-corona-massnahmen-enden-impfpflicht-mens/ https://lagedernation.org/podcast/ldn284-ukraine-krieg-6-woc...
- mschuster91 5y ago
  > It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance. It's a bit more complex than that. Following the liberalization of the gas market, "discount providers" appeared who simply bought on the spot market because that is usually drastically cheaper than long-term contracts, and also the large utilities shifted parts of their purchase to spot market contracts for the same reason. For many years this worked just fine from an outside POV, and the margins on the retail gas price that the utilities made were usually large enough to account for short-term supply price hikes without having to raise new capital or retail prices. All seemed to be well. Last year, people noticed that Gazprom's storage facilities were unusually low. Gazprom of course denied any wrongdoing, they claimed they are fulfilling their contractual obligations and that's it. Which is objectively true and as a result, no regulatory agency had any legal authority to step in. And now, with the invasion ongoing (and for a few months prior), Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out. The responsibility for the current situation rests to a large part on the utilities who forewent resilience (in form of more expensive long running contracts) in favor of short term profits. We dug our own and the Ukrainian's graves at the same time.
  - fuoqi 5y ago
    >Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out. What do you expect to happen when long-term contracts get tied to spot prices? Why the hell would Gazprom willingly lower the spot prices when bulk of its sales will suffer from it?

baq 5y ago

there's been talk of gazprom being a safe haven for higher placed people running from russia's recently tightened regime. think officials and/or FSB agents, etc. wanting to avoid sanctions by changing ownership structure of gazprom to western shell companies.

nieksand 5y ago

Here is the German explanation of what happened: https://www-sueddeutsche-de.translate.goog/wirtschaft/erdgas-energieversorgung-russland-ukraine-gazprom-sanktionen-bundesnetzagentur-1.5560838?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=de https://www-sueddeutsche-de.translate.goog/wirtschaft/erdgas...

ls15 5y ago

From another article: https://www.reuters.com/business/energy/germany-approves-law-mandating-full-gas-storage-before-winter-2022-03-25/ https://www.reuters.com/business/energy/germany-approves-law... > In Germany, a third of gas storage belongs to Russia's Gazprom (GAZP.MM), whose facilities in Germany had lower levels of stored gas this winter than those operated by other companies. In my opinion, Gazprom did so (last year) in order to strategically weaken Germany's position and strenghten Russia's position, by reducing the amount of gas that is stored in Germany.

ce4 5y ago

Apparently the company was sold or ownership restructured in march without prior notification of the regulatory body. The new owner is Gazprom Export LLC, of which ownership is unclear - it is suspected that Gazprom tries/tried to evade regulatory control over critical german infrastructure, thats why Minister Habeck has transferred control over to the Bundesnetzagentur as a trustee. Edit: Source (paywalled, german) https://www.spiegel.de/wirtschaft/gazprom-germania-hat-bereits-einen-neuen-eigentuemer-a-706607c7-55f8-4e0c-a4f6-2bbcf4dfbb65 https://www.spiegel.de/wirtschaft/gazprom-germania-hat-berei...

beberlei 5y ago

Gazprom attenpted to change owners and default the company. In that case the gas contracts would have been void including its negotiated prices (under currebt market value) and the currency in euro instead of rubbels.

diskapital 5y ago
> Gazprom attenpted to change owners and default the company. Is that illegal? I wonder about rule of law. We talk about this as sacrosanct here in the "West". It is funny that when push comes to shove (in my perception at least), we're quick to break the rules to get the outcome we want. When say a 3rd world country does something like this in response to a "Western" multinational's actions (perhaps a controversial example would be Mossadegh nationalizing APOC), then the response we take it is pretty severe (often involving significant amounts of violence) and we portray ourselves as being "morally" rightous, often with the very same "rule of law" claim. Just something I like to think about in this scenario. Not trying to push any agenda.
- rfrey 5y ago
  You ask a question, then immediately assume the answer and draw conclusions based on that answer. I dispute that this is just something you like to think about ("Just asking questions here...") or that you are not pushing an agenda.
  - diskapital 5y ago
    I beg forgiveness if my question and thoughts on the matter are somehow perceived as an agenda. I haven't studied the Gazprom case carefully, but after all, the title of OP's article is "Germany has seized control of Gazprom", not Germany has lawfully taken over management of Gazprom assets after a protracted court case establishing ownership and takeover processes, so am I really at fault for drawing conclusions based on that?
    - rfrey 5y ago
      Perhaps I was too harsh, and you are not a native English speaker? "Seize" simply means to take control. The second definition in Miriam Webster is "to take control by legal means". Police seize drugs, for example.

cf141q5325 5y ago

I read a great reader comment on the topic (also in German so try DeepL) https://blog.fefe.de/?ts=9cb54d35 https://blog.fefe.de/?ts=9cb54d35 Its a political push and pull about who defaults on the existing contracts on gas import, seeing as Russia wants to be payed in ruble now, while Germany would prefer the payments to be stuck on a EU bank account as a form of reparation payments to the Ukraine. To prevent this outcome, Russia in effect might be liquidating the Gazprom Germania. With Gazprom Germania being the ones doing the actual importing. Over the last weekend there was a change in ownership of the Gazprom Germania to new unknown owners. So they might be already bankrupt. To prevent this, Germany is now seizing control of Gazprom Germania and might be on the hook to prevent an insolvency to not default on the contracts with Russia. In short, the German government fucked up majorly. edit: Check "throwhow"s post in this thread for a longer summary

mkoryak 5y ago
I am curious, why is this being downvoted?
- gumby 5y ago
  Because ultimately it makes a strong assertion that the German government fucked up without supporting it. There’s nothing wrong with saying the government fucked up (though I don’t think it did). But the non sequitur opinion doesn’t add to the discussion.
  - cf141q5325 5y ago
    Its the summary of the commentary. I dont think you can justify not mentioning that bias.
the_mitsuhiko 5y ago
That comment is way to emotional to give it more than a few minutes of thought. It mixes facts with an unnecessary reaching commentary.
- 5y ago

kkfx 5y ago

Gazprom formally cease it's activity in Germany, and it's German branch operate North Stream gas terminals. "seized" is a bad term to say "the State substitute the local management to ensure terminals operations to been able to buy the gas they need. If you really look for "sanctions" you'll see that there are some, but not really touching the energy sector since there is so far no viable alternative.

dathinab 5y ago

> Are they in essence capturing some reserves? No, sized here means "put under control of a trustee until the situation is resolved" it doesn't mean "take over ownership". The reason that happens is because the persons(s) currently in control of Gazprom Germania did try to use that control to act against German law in a way which threatens national security. This is also more about Gas infrastructure then Gas as far as I can tell. My guess is that some Russian oligarch tried to move ownership to one (or potentially many) chains of "dummy" companies which obfuscate the actual owner and go through many other non-Russian nationalities. This e.g. would make many legal actions against Gazprom Germania harder as the new (dumy) "owner(s)" would not be from Russia or any other sanctioned state.

kmlx 5y ago
> would make many legal actions against Gazprom Germania harder what legal action? Gazprom is not under any sanctions…