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Energy: the good deals of Russian companies in Germany – 04/11/2022 at 08:15

Subsidiaries of the giants Gazprom and Rosneft are major players in the German energy infrastructure (AFP/John MACDOUGALL)

Subsidiaries of the giants Gazprom and Rosneft are major players in the German energy infrastructure (AFP/John MACDOUGALL)

Grappled by its reliance on Russian gas, Germany has discovered another Achilles’ heel: the weight of Russian capital in its oil refineries, pipelines and other gas reservoirs.

Subsidiaries of the giants Gazprom and Rosneft are major players in the country’s energy infrastructure.

German political and economic leaders are “in front of the ruins” of cooperation with Russia long seen as the guarantor of a detente with Vladimir Putin’s regime, Spiegel magazine noted.

“They have to face the facts, the weekly continues: they did not rely on agents of change within Russia, but perhaps on Trojan horses from the Kremlin.”

– Tanks

At the beginning of April, the German government made an unprecedented decision: to temporarily take control of the German subsidiary of Gazprom, a drastic measure justified by an opaque transfer of ownership of the company.

The Minister of Economic Affairs invoked issues of “public order and national security”.

Russian gas imports by EU country in 2020, in terajoules (AFP/)

Russian gas imports by EU country in 2020, in terajoules (AFP/)

And rightly so: owned by Gazprom, the Rehden reservoir (northwest), in Lower Saxony, alone represents about 20% of Germany’s total gas storage capacity.

With a capacity of 4 billion cubic meters of gas, it is presented as the largest in Europe. It belonged to the German group BASF until 2015 and was sold to the company Astora, a subsidiary of Gazprom

The Russian group is suspected of having deliberately kept the storage low in the summer prior to the invasion of Ukraine. Rehden’s reservoir is only 0.5% full.

Astora has further storage facilities in Jemgum, on the border with the Netherlands, and in Haidach, Austria.

Gazprom Germania also had an interest in a large storage facility in a salt cavern not far from Hamburg.

– Distribution networks

Gascade, one of the largest gas distribution network operators in Germany, is also 50.03% owned by Gazprom-Germania.

A gas receiving station of the operator Gascade, in September 2021 in Lubmin, Northeast Germany (AFP / John MACDOUGALL)

A gas receiving station of the operator Gascade, in September 2021 in Lubmin, Northeast Germany (AFP / John MACDOUGALL)

The company describes its network of 3,200 kilometers of gas pipelines as “the hub of European natural gas transport”. His pipes called Eugal, Midal, Stegal or Weda transport the raw material to the German metropolises.

On its website, the company claims to act independently: “Gascade’s transportation business is not subject to the influence of the Gazprom group or that of any other shareholder.”

Other important links, such as the Northern European NEL gas pipeline and the Opal gas pipeline in the Baltic Sea, are owned by the company Wiga transports, in which Gazprom Germania has a 49.98% stake.

The rest of Gascade and Wiga Transport is owned by German group Wintershall Dea, a third party owned by Russian oligarch Mikhail Fridman, now under Western sanctions.

With a market share of approximately 20%, Wingas, a wholly-owned subsidiary of Gazprom-Germania, plays a leading role in the distribution of gas, particularly to German municipal utilities, industrial companies and power plants.

The German state’s supervision of Gazprom’s subsidiaries is planned until September 30. During this period, the government will have to choose between nationalization and sale to a new owner.

– Refineries

The Russian oil giant’s Rosneft Germany subsidiary claims to supply a quarter of all German crude oil imports.

The PCK refinery in Schwedt, east of Berlin, on April 2, 2022 (AFP/John MACDOUGALL)

The PCK refinery in Schwedt, east of Berlin, on April 2, 2022 (AFP/John MACDOUGALL)

The company is the majority shareholder of the PCK refinery in Schwedt, east of Berlin. This site can process approximately 11.6 million tons of crude oil per year, which is equivalent to approximately 11% of Germany’s total oil consumption.

Rosneft wants to buy the 37.5% stake of the Anglo-Dutch group Shell in the refinery, increasing the share to 92%.

The Bundeskartellamt had approved this transaction a few days before the outbreak of the war. The Ministry of Economic Affairs is currently investigating whether the purchase can still be stopped.

Rosneft Germany also owns 24% and almost 29% of the shares of the major refineries Miro and Bayernoil in southern Germany.

Like Gazprom in the gas sector, Rosneft is also one of the largest oil distributors and logistics service providers. According to the daily newspaper Handelsblatt, the group companies supply 4,000 large customers in Germany.

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