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    German gas trader VNG nears multibillion-euro rescue deal-sources

Summary

Compensation could come for costs associated with replacing Russian gas.

by: Reuters

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Complimentary, Natural Gas & LNG News, Europe, Security of Supply, Corporate, Political, Ministries, News By Country, Germany

German gas trader VNG nears multibillion-euro rescue deal-sources

Frankfurt, Nov 21 (Reuters) - German gas trader VNG is nearing a deal under which it will receive several billions euros in state aid to shoulder the huge costs of replacing Russian gas with higher-priced alternatives, two people familiar with the matter said.

An agreement could be reached as soon as this week and cover a mid single-digit billion euro sum for VNG, which it would receive in loans or guarantees, the people said.

The talks are ongoing and details of the final agreement could still change, the people said.

EnBW and VNG, which applied for state aid in September, both declined to comment. Germany's Economy Ministry was not immediately available for comment.

Like Uniper and Sefe, formerly known as Gazprom Germania, VNG -- majority-owned by German utility EnBW -- was hit by the halt to Russian gas supplies, which forced it to buy replacement volumes at higher prices.

Germany has launched a 200 billion euro ($205 billion) scheme to help households and industry cope with soaring energy prices as well as support or bail out its three major gas importers.

VNG last month reached an out of court settlement with Sefe over a 65 terawatt hour (TWh) supply contract, essentially freeing it from the surplus costs related to procuring alternative volumes until the end of 2022.

But VNG is still financially exposed via a 35 TWh contract directly with Gazprom, which is also due to expire by the end of 2022.

EnBW Chief Financial Officer Thomas Kusterer earlier this month said that a deal would be finalised within days and that the government would not nationalise VNG or take a stake in the gas trader as part of the deal.

EnBW expects to take a 1.2 billion euro hit in 2022 due to the crisis, a number Kusterer said already reflects the rescue package.

($1 = 0.9774 euros)

(Reporting by Christoph Steitz, Tom Kaeckenhoff and Christian Kraemer. Editing by Jane Merriman)