Germany supplies lawsuits to Gazprom

RWE AG, Germany’s largest electricity producer, has initiated arbitration proceedings with Gazprom seeking damages for underdelivered gas. A week earlier, it became known about similar claims from Uniper, demanding €11.6 billion in compensation from Gazprom. Due to the reduction in supplies from the Russian Federation, German importers were forced to buy expensive gas on the market. RWE is not a major buyer of Gazprom, we are talking about compensation for relatively small volumes purchased on the electronic trading platform of Gazprom Export.

The German energy company RWE AG has initiated arbitration proceedings against Gazprom due to a shortage of gas, the newspaper reported on December 5 Handelsblat citing sources, the information was confirmed to the publication by RWE. Last week became known that the German Uniper also applied to the arbitration court in an attempt to compensate €11.6 billion from Gazprom for the undelivered gas volumes since June. Gazprom Export denies the violation of the contract with Uniper and considers claims for damages to be unlawful.

Gazprom progressively began to cut gas supplies to Germany via Nord Stream from June to the end of August, when they completely stopped. The Russian company associated its actions with the problem of servicing turbines by Siemens Energy at the Portovaya compressor station.

The dispute with RWE AG does not concern long-term contractual obligations, as is the case with Uniper.

This, according to Kommersant, is about several small contracts concluded several years ago on the Gazprom Export electronic trading platform. The lawsuit from RWE, according to Kommersant’s interlocutors, was received earlier than from Uniper.

Gazprom did not provide any comments.

While Uniper was supposed to receive about 18.5 billion cubic meters from the Russian Federation, RWE expected that by 2023 the volume of deliveries would be 1.4 billion cubic meters. But due to the reduction in supplies from the Russian Federation, this volume decreased to 0.4 billion cubic meters, Reuters writes. As a result, RWE, like many other Gazprom buyers in Europe, including Uniper, was forced to buy replacement gas on the more expensive spot market, at a significant cost to the company.

Metzler Bank analyst Guido Hoifman, cited by Handelsblat, estimates that RWE likely incurred €1 billion in costs.

To alleviate the consequences of the energy crisis in Germany, RWE has postponed its plans to phase out coal by eight years, until 2030, and also extended the operation of two coal-fired power units at Neurath, Germany’s largest thermal power plant. At the same time, RWE stopped importing coal from Russia.

It is not yet clear whether we should expect similar lawsuits from other major buyers of Gazprom in Europe. The second supplier of gas to local energy and industrial companies in Europe after Uniper is trader Wingas, previously wholly owned by the Russian holding Gazprom Germania, now renamed SEFE and transferred to the control of the Federal Network Agency of Germany. Gazprom imposed sanctions on its former structure and completely stopped gas supplies to it. SEFE previously reported that it was looking into “current and future claims related to the interruption of gas supplies.”

Claims from VNG, the third largest importer in Germany, have not yet been received by Gazprom, Kommersant’s interlocutors say. VNG said it was exploring all options to limit its losses as much as possible.

Tatyana Dyatel