Cuts from Russia’s Gazprom have forced a 2nd German gas supplier to ask for a government bailout

Gas supply disruptions caused by Russia are forcing a second German supplier to ask for a government bailout. Story by Market Insider 

Germany’s VNG said Friday that the company suffered substantial losses thanks to cuts from Gazprom since the onset of Russia’s invasion of Ukraine.

VNG added that it couldn’t fully pass on the increased market prices for gas onto its customers, and that a bailout was necessary to honor existing contracts. 

“Gas quantities affected by Russian supply disruptions, in some cases at agreed fixed prices, now have to be procured at massively higher prices due to the war,” VNG said in a statement.

The company also said an existing contract with Gazprom Export for 35 terawatt hours worth of gas per year won’t be fulfilled at all, and that VNG is carrying the loss themselves which will cost 1 billion euros this year.

Major Brand Discounts

The second of the two contracts with a German upstream supplier for 65 TWh of gas per year hasn’t been regularly fulfilled this year, VNG says, and the current economic trajectory for the company “would be unsustainable.”

VNG is one of Germany’s biggest importer of natural gas and joins peer Uniper in seeking government aid to step fallout from Russia’s invasion of Ukraine. Uniper first received aid worth €15 billion, which has since skyrocketed to €19 billion as the energy crisis in Europe has worsened. 

And Gazprom, Russia’s state-run gas giant, said last week that flows to Europe won’t resume until Western sanctions are lifted.

Elevated energy prices have helped carry the Kremlin through a new landscape of business that includes some of the country’s largest banks being shuttered from international payment system SWIFT. Continue reading the full story: Cuts from Russia’s Gazprom have forced a 2nd German gas supplier to ask for a government bailout

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