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 Gazprom curbs its presence in Europe, sources say

газ газпром

Gazprom put up its 10.5% stake in the German gas distributor Verbundnetz Gas (VNG) for sale, as part of a new strategy to wrap up its presence in Europe, three industry sources confirm.

This is stated by TASS, Censor.NET reports citing Liga.

According to a source close to the Russian monopoly, Gazprom has several offers to buy its stake in VNG. The second industry source confirmed the intention of Gazprom to sell the stake.

German EWE, which last fall acquired a 15.79% stake in VNG from Gazprom's main European partner German Wintershall and consolidated 63.69% is ready to buy the package. The blocking stake in VNG belongs to several German municipal services.

Read also: Gazprom's decision to increase gas supply to EU has brought down the price to $240

The source said that although the deal is not yet complete, but the agreement with EWE to sell the package is already signed. The cost of the package could constitute around 200 million euros, based on the Wintershall and EWE transaction of selling 15.79% stake in VNG for 320 million euros.

In December 2014, Gazprom CEO Alexei Miller said: "Our strategy regarding the European market is changing. In principle, the decision to stop the South Stream is the beginning of the end of our market model, when we focused on the delivery to the ultimate consumer."

A source also confirmed that "the sale of VNG fits into Gazprom's new strategy in Europe."

The main assets of Gazprom in Europe (gas transportation networks, underground storage facilities, retail companies) are controlled by W&G joint venture, with German Wintershall being Gazprom's partner.

Read also: Gazprom is not in a position to dictate its terms this year - Naftohaz head

VNG is a German gas distribution company, which sells gas not only in Germany but also in Austria, Italy, Czech Republic, Slovakia and Poland. VNG is implementing projects on gas production in Norway, and also owns underground storages.

Gazprom acquired a 5% stake in VNG in 1991. Then, after the unification of Germany, the Russian monopoly counted on developing long-term cooperation with Germany, so in 2009, it increased its stake to 10.5%.

The Russian monopoly owns a stake in VNG through its subsidiary Gazprom Germania.

 
 
 
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