In Germany, VNG is expected to receive several billion euros in state aid to alleviate the energy crisis in Europe.
State financial aid
In Germany, VNG could benefit from public support. The aim is to cope with the huge costs of replacing Russian gas with more expensive alternatives. Thus, the agreement could be reached this week and amount to about €1 billion.
EnBW and VNG, requested state aid in September. The cessation of Russian gas deliveries affects VNG, as it doesUniper and Sefe, formerly Gazprom Germania. This forces the company to purchase replacement volumes at higher prices.
Germany launched a €200 billion ($205 billion) program to help households and industry. The objective is to deal with soaring energy prices. In addition, the program supports or bails out its three largest gas importers.
A crisis situation
Last month, VNG concluded an agreement with Sefe. The agreement was for a 65TWh supply contract. The contract relieved the company of excess costs associated with the purchase of replacement volumes until the end of 2022.
However, in Germany, VNG is financially exposed through a 35TWh contract. This contract directly links the company and Gazprom. However, the contract also expires at the end of 2022.
EnBW’s CFO, Thomas Kusterer, said earlier this month that an agreement would be reached soon. He specified that Germany would not nationalize VNG and would not take a stake in the company. In addition, EnBW expects to incur a loss of $1.2 billion in 2022 due to the crisis.
