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Germany has taken control of a Gazprom branch to maintain its gas supply

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Berlin has taken over a local unit of the Russian gas giant Gazprom, the German Ministry of Economy announced on Monday.

The German economy ministry says Gazprom Germany has violated foreign trade law. The announcement of the seizure came after the Ministry of Economic Affairs learned that Gazprom Germany had been acquired by JSC Palmary and Gazprom Export Business Services LLC – but it was unclear who the two companies were, according to businessinsider.com.

The German Ministry of Economy justified the takeover by saying that it had not granted permission for the acquisition of Gazprom Germany. Permission is needed, the ministry said, if investors are not from the European Union and “critical infrastructure” is involved.

“The federal government is doing everything it can to keep security in Germany safe,” said Economy Minister Robert Habeck. “This also includes not exposing Germany’s energy infrastructure to arbitrary Kremlin decisions. The proper conduct of business in Germany must be ensured.”

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Gazprom Germany owns gas storage, gas transmission and energy trade units in the country. The company is “of particular importance for gas supplies,” the German economy ministry said.

Germany’s federal energy regulator, the Bundesnetzagentur, will serve as Gazprom Germany’s temporary administrator until September 2022, the economy ministry said in a statement.

Russia’s war in Ukraine has raised concerns about Germany’s energy security. Last week, Germany launched an emergency plan to deal with natural gas outages after Russian President Vladimir Putin demanded payment in rubles and threatened to shut down Russian gas completely in Europe.

Germany is now in the “early warning phase” of its energy emergency plan, with Berlin urging all energy consumers – both industry and households – to save energy and reduce consumption. If the situation worsens, the country could streamline gas in the latter part of the three-stage plan, with industry leading the way in power outages, according to the German Ministry of Economy. The move could devastate the economy and lead to job losses.

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Last week, the business newspaper Handelsblatt reported that Germany is considering nationalizing Gazprom and Rosneft in the country.

Berlin is also considering expropriating Gazprom’s assets, forcing the giant to sell its gas storage facilities in Germany, Politico reported on Friday, citing a government official and two other people informed of the plans.

Russian gas accounted for 55 percent of Germany’s gas imports in 2021 and 40 percent of its gas imports in the first quarter of 2022, Reuters reported. The country has pledged to end its use of Russian gas by 2024, Habeck said in a March 25 press release.

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