Gazprom Energy UK

July 2022

The following information has been provided to us by the Department for Business, Energy, and Industrial Strategy (BEIS) and the Department for Education (DfE).
This information is correct as of 28 July 2022 but may change.
  1. Gazprom Energy UK continues to trade, and the Government continues to work with the regulator, OFGEM, to monitor the situation. The German Government has appointed the Bundesnetzagentur as the fiduciary ‘trustee’ of the Gazprom Germania (which is the parent company of Gazprom’s UK entities including their Retail business) and this arrangement has been extended so that it will run beyond the original expiry date of September 2022. The Bundesnetzagentur, which is an independent regulatory authority in Germany that is similar to Ofgem in the UK, now effectively runs the company and will remain the fiduciary ‘trustee’ owner of Gazprom Germania. The Gazprom Germania group will also be renamed “Securing Energy for Europe GmbH” (SEFE). In addition, the German development bank, KfW, is supporting Gazprom Germania with a loan of 9.8 billion euros which ensures the ongoing solvency of Gazprom Germania and its UK Subsidiaries (Retail and M&T) The German Government have highlighted that this loan will be ringfenced so that it can only be used for the business operations of the group and cannot flow to Russia. This recent announcement means there will be no change to existing contracts held by UK customers with the company, and this change will not affect the supply of gas to those customers.
  1. Additionally, the Russian state imposed counter sanctions on Gazprom Germania on 11 May, preventing any Russian entity from exporting products and raw materials to sanctioned entities.
  1. Whilst this is ultimately a commercial matter, Gazprom’s retail business continues to trade in the UK and customers should exercise their own commercial judgement with regards to energy supply contracts they have in place at the moment, including on any decisions to terminate contractual relationships with the company.
  1. Cabinet Office have published Procurement Policy Notice PPN 01/22 covering contracts with suppliers from Russia and Belarus. Where it is relevant and proportionate to do so, settings should consider applying the approach set out in the PPN. Based on the above, Gazprom UK is not classed as a Russian/Belarusian supplier whilst it is under the control of the Bundesnetzagentur; we recommend that settings who wish to terminate a contract only proceed to do so if an alternative supplier can be sourced in line with value for money, affordability and with minimal disruption to public services.
  1. This link has DfE’s “recommended” gas frameworks (Note; none of these frameworks have Gazprom in their supply chain, this is coincidental and not by design to avoid this supplier)

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