Germany prepares 5-10 bln euro rescue for Gazprom Germania - Bloomberg News

Germany is preparing a bailout package of between 5 to 10 billion euros ($5.22-$10.44 billion) for Gazprom Germania, an energy company abandoned by Russia's Gazprom, Bloomberg News reported on Monday, citing sources familiar with the matter. The rescue could come as early as this week, with state-owned KfW bank acting as lender, but talks were ongoing and the plans could change, the Bloomberg report said.

Germany is preparing a bailout package of between 5 to 10 billion euros ($5.22-$10.44 billion) for Gazprom Germania, an energy company abandoned by Russia's Gazprom, Bloomberg News reported on Monday, citing sources familiar with the matter.

The rescue could come as early as this week, with state-owned KfW bank acting as lender, but talks were ongoing and the plans could change, the Bloomberg report said. A designated spokesman for the German government declined to comment on the report.

A spokesman for KfW declined to comment on the report One German government source told Reuters that KfW credits appeared to be "an obvious tool" to help Gazprom Germania, given the company's importance and current difficulties, but their scale could not yet be communicated.

This source also said that Germany's finance and economy ministries in March and April drew up "protective umbrella schemes" to support companies hit by the impact of the Ukraine conflict, which could apply here. Gazprom Germania, which operates across a number of countries but focuses its trading, storage and transmission activities on Germany, continental Europe's biggest gas market, needs a financial boost to ensure it can uphold a crucial role in the region's gas market.

The company's biggest problem, in addition to having to retain customers, business partners and smooth operations, is the high price of gas. Gazprom Germania has to buy gas in the spot markets for some of its contractual obligations after Gazprom quit its gas business in Germany, apart from some export activities.

When asked by Reuters about the Bloomberg report, a spokesman for energy regulator, the Bundesnetzagentur in Bonn, said: "We do not participate in speculation." He said everyone at the regulator had been working to ensure that business operations at Gazprom Germania are continuing since the regulator stepped in on April 4.

Spot market prices of gas in Germany are three times their level of a year ago. This results from a combination of a sharp global demand recovery and dwindling supplies out of Russia already from last autumn, which preceded disruptions seen since the war.

($1 = 0.9577 euros)

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