The struggling gas importer VNG gets several hundred million euros from the state and withdrew its application for so-called stabilization measures on Friday. The federal government will not participate in VNG, said the Leipzig group, the majority owner EnBW from Karlsruhe and the Federal Ministry of Economics in Berlin.
At the beginning of September, VNG submitted an application for state stabilization measures because the group had to buy gas more expensively than it was allowed to sell as a result of the Russian war of aggression in Ukraine. The agreement with the federal government helps to stabilize the company, said VNG CEO Ulf Heitmüller. “We will bear the remaining economic burdens together with our shareholders.” Further stabilization measures are no longer necessary.
According to the Ministry of Economic Affairs, the withdrawal of the application improves VNG’s position in being perceived on the market as a reliable contractual partner. “This is particularly important with a view to opening up new sources of supply for importing natural gas and thus serves to ensure security of supply in Germany.”
In order to still be able to supply customers after Russian gas supplies were cut back, VNG had to procure replacements at significantly higher prices. The contractual partners deliver the natural gas to several hundred municipal utilities and industrial customers. According to its own statements, VNG covers a fifth of the gas requirements in Germany.
In order to ensure security of supply, the federal government had forbidden VNG to withdraw from the contracts or to change prices. Now he is paying partial compensation in the mid three-digit million range, it said. The money came from the Economic Stabilization Fund, said a ministry spokeswoman.
The background here is the high replacement procurement costs in order to actually be able to provide the contractually agreed quantities to the Russian Gazprom Export (GPE) as a pre-supplier. A settlement had already been reached for an even larger contract with WIEH – a subsidiary of the former Gazprom subsidiary Sefe. Accordingly, WIEH will bear the additional costs for the replacement procurement in the current financial year and the costs previously borne by VNG. Both contracts expire at the end of the year.
“The risks from the replacement procurement from the two Russian gas supply contracts have thus finally been eliminated,” announced VNG. CFO Thomas Kusterer from the majority shareholder EnBW explained that as a result of the agreement with the federal government and lower market prices, the total burden on the EnBW result – regardless of further price developments by the end of the year – will not amount to more than 1.18 billion euros. “The non-operating impact on earnings of around EUR 600 million, which we had initially set aside for the fourth quarter of 2022, can be eliminated.”
