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Russia sanctions west European Gazprom units and owner of Polish part of gas pipeline

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Russia has imposed sanctions against units of Gazprom Germania, in which its gas producer Gazprom ceded ownership, and also against EuRoPol GAZ SA, owner of the Polish part of the Yamal-Europe gas pipeline.

The list of sanctioned entities published by the Russian government on its website on Wednesday included 31 companies based in countries that have imposed sanctions on Russia in response to its invasion of Ukraine.

It notably includes local subsidiaries of Gazprom, supplier of more than a third of Europe’s gas, much of it via the Yamal-Europe pipeline.

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With assets and subsidiaries in Germany, Britain, Switzerland, Belgium, the Czech Republic and outside Europe, Gazprom’s various activities are essential for the European gas market and its supply to industry and households.

Gazprom Germania’s operations, based on Russia’s gas production, span supplies to wholesalers and retailers, storage and pipeline transmission, covering the entire gas value chain.

Its operations include Germany’s biggest gas storage facility at Rehden in Lower Saxony, with 4 billion cubic meters of capacity.
The list published on Wednesday does not provide specifics of the sanctions to be imposed.

However, under a decree issued by President Vladimir Putin on May 3, no Russian entity is allowed to make deals with the entities under sanctions, or fulfil its obligations under existing deals.

The decree explicitly forbids the export of products and raw materials to people and entities on the sanctions list.

Putin framed the decree as a response to what he cast as the illegal actions of the United States and its allies meant to deprive “the Russian Federation, citizens of the Russian Federation and Russian legal entities of property rights” or to restrict their property rights.

The United States and its allies have imposed the most severe sanctions in modern history on Russia and Moscow’s business elite, steps that Putin casts as a declaration of economic war.

Putin repeatedly warned that Moscow would respond in kind, though until last week the Kremlin’s toughest economic response had been to cut off gas supplies to Poland and Bulgaria and demand a new payment scheme for European buyers of gas.

Germany’s energy network regulator took control of operations at Gazprom Germania after Gazprom abandoned it last month without explanation.

Wingas, a Gazprom Germania subsidiary and one of Germany’s biggest gas traders, said after the takeover that it would be operating under the changed parameters.

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