BERLIN – German gas company VNG became the latest European energy firm to seek government aid as reduced Russian pipeline flows pushed up energy prices and put its business under stress.
VNG, Germany’s third-largest gas importer and storage operator, asked for support to “avoid further damage” and to maintain the group’s “ability to act”, it said in a statement.
Russia has slowly dwindled supplies of gas to Europe in the wake of the invasion of Ukraine, sending prices for the fuel soaring.
Unfulfilled contracts meant “gas quantities had to be procured at significantly higher prices” to meet supply arrangements with customers at “significantly lower, contractually agreed prices”, leading to a cash crunch, VNG said.
Further “stabilisation measures” were needed despite a government plan to allow gas companies to pass on some of their procurement costs from October 1.
VNG, which is majority owned by the German utility EnBW and partially owned by the region of Baden-Wuerttemberg, said it remained in “ongoing talks” with the federal government over rescue measures.
Uniper, Germany’s biggest importer of Russian gas, asked for government support earlier this year under the pressure of rising gas prices.
Officials in Berlin agreed to take a 30% stake in the struggling company as part of a bailout agreed in July.
But a €9 billion (RM40.87 billion) line of credit extended by Berlin to the company to secure its financial position had already been exhausted by late August, Uniper said.
Finland, Austria, and Switzerland also have extended support to prop up energy firms. – AFP, September 9, 2022
