Status: 09/09/2022 2:13 p.m
Because of the high energy prices, the East German gas importer VNG now also needs support. The utility submitted an application for state aid to the Federal Ministry of Economics today.
After Uniper, the East German gas trader VNG now also needs help from the state because of the rapidly increasing energy prices. “In order to avert further damage from VNG and to ensure the ability of the VNG Group to act as a whole,” the company felt compelled to submit a corresponding application, the utility announced today. The subsidiary of the energy group EnBW is one of the largest German gas importers.
Ministry of Economy confirms application
The ailing company has applied to the Federal Ministry of Economics for so-called stabilization measures. “The measures are aimed at absorbing the current accumulation of considerable losses from the replacement procurement of natural gas and at enabling the continuation of business activities,” says the Karlsruhe parent company EnBW, which holds a majority stake.
The Ministry of Economy confirmed to the ARD Capital Studiothat the application for stabilization measures according to the Energy Security Act was received in the morning. The application will now be examined comprehensively, it said. Many questions initially remained unclear – for example, what sums are involved and whether the federal government may be considering a participation. There are various options, said a ministry spokesman. Which instrument will be chosen is open.
VNG covers a fifth of the gas requirement
The Leipziger Verbundnetzgas AG (VNG) is after Uniper and the former Gazprom subsidiary Gazprom Germania, which is currently under the trusteeship of the Federal Network Agency and renamed SEFE, the third largest gas importer in Germany. In 2021, the group accounted for around a fifth of German gas requirements. The Leipzig-based company claims to have around 1,500 employees. In the 2021 financial year, VNG achieved an invoiced turnover of around 18.5 billion euros.
The parent company EnBW describes the company as systemically important for the security of supply in Germany, it plays an important role in Saxony and eastern Germany. Accordingly, the VNG Group supplies around 400 municipal utilities and industrial companies with gas. For comparison: the troubled Uniper Group, for which the federal government had put together a billion-euro rescue package in Julyis estimated to have around 1000 customers.
Two contracts are no longer served
Gas importers have to buy natural gas on the market at extortionate prices to meet their obligations to customers because of the halt to Russian supplies. According to the company, the situation has worsened significantly since August. Russia has now completely stopped supplying gas through the Nord Stream 1 Baltic Sea pipeline.
According to VNG, there are two contracts that are affected by Russian delivery failures. There is a direct contract for around 35 terawatt hours (ThW) of gas procurement per year with Gazprom Export, which is currently no longer being served, the statement said. Even the larger contract “with a domestic upstream supplier”, which covers gas procurement of around 65 TWh per year, has not been consistently fulfilled since mid-May.
Contrary to what was previously expected, VNG had to bear a significant proportion of the cost of the replacement procurement in August at historically high gas prices. The company put the loss for this year at around one billion euros. This will also not be compensated by the gas surcharge that will take effect from October.