EU, German Regulators Conduct Surprise Raids on Gazprom Subsidiaries

European Union and German regulators carried out unannounced inspections at several German companies involved in the supply, transmission and storage of natural gas on suspicion of violating E.U. competition regulations.

Etzel natural gas storage facility on Lower Saxony, Germany run by Gazprom Germania. Credit: Gazprom Germania website

European Union and German regulators carried out unannounced inspections at several German companies involved in the supply, transmission and storage of natural gas on suspicion of violating E.U. competition regulations.

None of the companies targeted in the raids were identified. There were no further comments from the European Commission and Germany’s antitrust regulator, the Bundeskartellamt. German media reported that two companies subjected to the inspections were Gazprom Germania and Wingas, both subsidiaries of Gazprom, Russia’s state-owned gas supplier.

The commission said the surprise raids were part of “a preliminary investigatory step into suspected anticompetitive practices.” If sufficient evidence of wrongdoing is found, a formal investigation can proceed.

Earlier in the month, the commission singled out Gazprom for possible violations of market regulations on competition. In a March 8 statement that laid out its plans to diversify Europe’s sources of natural gas, the European Commission said:  “The commission continues its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom.”

In 2018, the commission reached a settlement with Gazprom, after a long-running antitrust investigation into its dominance in regional gas markets across Europe. Unlike competition inquiries into companies like Google and Intel, this one did not result in a fine, provoking criticism from officials in Poland who feared the deal did not go far enough to prevent similar behaviour.

In addition to Wingas and Gazprom Germania, Gazprom holds stakes in several other companies that own or operate natural gas storage facilities and thousands of miles of pipeline.

Europe’s largest underground tank for natural gas, in Rehden, Germany, is owned by Astora, another subsidiary of Gazprom. But the amount of gas that it holds on reserve had dropped to historic lows even before Russia’s invasion of Ukraine on February 24. Last week, European Union leaders proposed requiring underground storage facilities to be at least 90% full by October 1 each year.

Gazprom is also involved in 4 long-distance pipelines, through joint ventures with the Germany-based Wintershall Dea, including Nord Stream, which owns the original pipeline carrying natural gas directly to Germany from Russia under the Baltic Sea.

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