By Christoph Steitz
FRANKFURT -VNG, one in every of Germany’s greatest importers of Russian pure fuel, on Friday requested the federal government for help to remain afloat, the newest European power agency to hunt state help due to Moscow’s provide cuts.
Whereas the corporate didn't disclose any particulars, this might theoretically embrace a request for partial state possession in response to stabilisation measures lined by Germany’s Vitality Safety of Provide Act.
“Till the beginning of the Russian conflict of aggression, VNG was a wholesome company group contributing to the safety of provide of fuel in Germany,” mentioned VNG, 74%-owned by German utility EnBW.
“The impacts of the Russian conflict on the power markets positioned VNG in an more and more vital monetary scenario by means of no fault of its personal,” VNG added.
The German authorities will evaluate the applying and is engaged on stabilising the corporate, economic system ministry spokespeople mentioned, including Berlin was not conscious of any further functions for help from power firms having been submitted.
“We're on a really, excellent path and this will probably be resolved quickly,” German Financial system Minister Robert Habeck mentioned in Brussels on Friday on talks between the federal government and VNG.
Like Uniper, which in July secured a authorities bailout, now totalling 19 billion euros ($19.2 billion), VNG has been hit by a pointy drop in Russian fuel deliveries, forcing it to fill the hole within the spot market at a lot larger costs.
RUSSIANCONTRACTS
Shares in EnBW, which itself is majority-owned by the state apart from a small free-float, narrowed losses and traded 0.9% larger at 1337 GMT after plunging as a lot as 10.3% earlier within the day.
VNG, which additionally counts native utilities and municipalities amongst its shareholders, has two long-term Russian fuel contracts with a complete quantity of 100 terawatt hours (TWh): one, accounting for 35 TWh, is immediately with Gazprom and can expire on the finish of the 12 months.
That contract will result in losses of about 1 billion euros in 2022, even when a fuel levy, which can allow fuel firms to move on hovering prices to clients from Oct. 1, is factored in, VNG mentioned, including this loss alone would nonetheless be bearable.
The problem is the remaining provide contracted with Sefe, previously referred to as Gazprom Germania, which got here beneath German trusteeship after Gazprom ditched it in April.
“This contract has not been persistently fulfilled since mid-Could,” VNG mentioned. “With help from the German authorities, methods have been sought in current weeks to succeed in a closing settlement. Nonetheless, this doesn't seem achievable within the close to future in a type that's economically viable for VNG.”
EnBW final month estimated the potential injury from the 2 contracts “within the low single-digit billion euro vary”.
“Ongoing talks between VNG AG with its shareholders and the Federal Authorities on choices for stabilisation of the corporate proceed in parallel,” EnBW mentioned.
($1 = 0.9907 euros)
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