The German government will begin the official process of privatizing the local unit of Russia’s Gazprom, which the previous government seized in 2022 after Russia invaded Ukraine and the EU imposed sanctions on Moscow.
Dubbed SEFE, or Securing Energy for Europe, the state entity handles energy import and infrastructure operations. In light of that latter part, the German government plans to organize a capital-raising round for the company, aiming to secure between 1.5 billion and 2 billion euros, equal to some $1.76 billion-$2.35 billion. The money will be used to expand the infrastructure that SEFE operates, Reuters reported, citing a Financial Times interview with SEFE’s chief executive.
The German state has been mulling over its options for SEFE ever since it nationalized Gazprom’s German business in 2022. Options under consideration included breaking the business up or selling it. A merger with industry major Uniper was also among the options. In any case, the privatization of the company was planned to be finalized by 2030.
In preparation for its ownership change, SEFE began to build its supply base to boost its attractiveness to potential suitors. Back in 2023, SEFE sealed a long-term LNG supply deal with a Russian company—Novatek—to be supplied from the Yamal LNG facility. Yamal LNG remains free of sanctions, and Europe is importing almost all the gas it produces.
Also in 2023, the state-owned German entity signed a big, long-term deal with Norway’s Equinor. Worth some $55 billion, the deal would see Equinor supply the German state firm with 10 billion cu m of natural gas annually over the period between 2024 and 2034.
A year later, SEFE struck a deal for 1 million tons of liquefied natural gas, delivered annually for a period of 15 years, with Emirati ADNOC. LNG deliveries will be made from Adnoc’s Ruwais LNG project, which is currently under development in Al Ruwais Industrial City, Abu Dhabi. Completing that project will take longer than originally planned because of the war.
By Irina Slav for Oilprice.com
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