A second German fuel provider has mentioned it is going to request a bailout from Berlin after it was compelled to soak up heavy losses attributable to decreased deliveries from Russia’s Gazprom.
VNG, considered one of Germany’s largest importers of pure fuel, mentioned on Friday that “portions affected by Russian provide disruptions, in some instances at agreed fastened costs, now should be procured at massively greater costs on the fuel markets”.
The Leipzig-based firm, which is majority owned by utility group EnBW, mentioned these prices couldn’t all be totally handed on to prospects and that it had already borne the price of a 35 terawatt hour contract instantly with Gazprom that will find yourself costing it €1bn this 12 months.
However a bigger, 65 TWh contract with an intermediate provider “has not been constantly fulfilled since mid-Might”, the corporate mentioned, with the price of substitute provides largely stuffed by EnBW by way of “ensures and credit score strains within the excessive triple-digit tens of millions of euros”.
EnBW booked a €550mn cost for anticipated losses at VNG within the first sixth months of the 12 months.
“To avert additional harm and to allow the VNG Group’s enterprise operations as an entire to proceed, VNG sees itself compelled to use for additional supporting measures,” the corporate mentioned in an announcement.
VNG’s enchantment comes weeks after Uniper, Europe’s largest purchaser of Russian fuel, was rescued by the German authorities. The Düsseldorf-based provider initially obtained a help bundle price €15bn, however this has since ballooned to €19bn because the vitality disaster has intensified.
Final week, after months of decreased provides, Gazprom mentioned it could utterly halt fuel flows by way of Nord Stream 1 — the pipeline that gives should of western Europe with fuel.
The corporate blamed a technical fault and difficulties repairing German-made generators in Canada. However the Kremlin then mentioned deliveries wouldn’t resume until sanctions towards Moscow, carried out in response to the invasion of Ukraine, have been lifted.
VNG is Germany’s third-largest fuel importer, after Uniper and Gazprom Germania, which Berlin seized management of in April. It provides fuel to roughly 400 municipal utilities and industrial operators and met roughly a fifth of Germany’s fuel necessities final 12 months.
In addition to proudly owning 74 per cent of VNG, EnBW provides vitality and water to about 5.5mn individuals. It additionally operates the Neckarwestheim II nuclear energy plant, considered one of two that the federal government on Monday mentioned it needed to maintain on standby past a deliberate shutdown on the finish of the 12 months.