As Russia moves to nationalize foreign companies exiting its market, the UK prepares to nationalize a major Russian natural-gas supplier
The UK government is said to be preparing to take over the UK arm of the Russian natural-gas giant Gazprom.
Olga Maltseva/AFP/Getty Images
Huileng Tan
Tue, March 22, 2022, 2:34 AM·2 min read
Gazprom's UK business is under strain over the Ukraine war.
The UK government is said to be preparing to take over the business to ensure supply continuity.
Gazprom's British retail unit supplies natural gas to about 20% of the UK's companies.
The UK government is preparing to temporarily nationalize the Russian natural-gas giant Gazprom's British retail supply unit, as it is in danger of collapsing and causing supply disruption, the Financial Times and Bloomberg reported on Monday.
Earlier this month, Russian President Vladimir Putin said Russia could seize and nationalize the assets of foreign companies leaving the country.
A move by the UK government to put Gazprom Marketing & Trading Retail under special administration appears designed to save the company as its customers abandon it over the war in Ukraine, the Financial Times reported. Sources told Bloomberg on Monday that many major natural-gas traders had instructed staff not to deal with Gazprom's trading arm.
The CEO of Gazprom, Alexei Miller, is sanctioned by the UK government. Gazprom itself doesn't face restrictions.
Gazprom Marketing & Trading Retail — which supplies natural gas to about 30,000 UK business customers, or about 20% of the country's companies — has been trying to find a buyer for the business, The Times of London reported on Sunday. But a person close to the company told the Financial Times that it "would be difficult" to reach a deal.
If Gazprom Marketing & Trading Retail were to collapse, the UK government could find another supplier to take over its client base or nationalize the company, with taxpayers providing the funds to keep it running, the Financial Times reported. Its clients in the UK include McDonald's, Siemens, and the National Health Service, according to the BBC.
Gazprom did not immediately respond to Insider's request for comment.
An analyst told Insider that the Kremlin was likely to take issue with the nationalization of Gazprom in the UK and see it as a political move.
"It could escalate tensions between the West and Russia," said Nirgunan Tiruchelvam, the head of consumer sector equity research at Tellimer.
"The West needs to tread carefully given Russia's supply of gas to Europe," Tiruchelvam, who covers the commodity sector, added.
Some fear that the Kremlin may cut off its natural-gas supply to Europe to retaliate against sweeping Western sanctions. The International Energy Agency has said Europe last year imported about 40% of its gas from Russia.
Huileng Tan
Tue, March 22, 2022, 2:34 AM·2 min read
Gazprom's UK business is under strain over the Ukraine war.
The UK government is said to be preparing to take over the business to ensure supply continuity.
Gazprom's British retail unit supplies natural gas to about 20% of the UK's companies.
The UK government is preparing to temporarily nationalize the Russian natural-gas giant Gazprom's British retail supply unit, as it is in danger of collapsing and causing supply disruption, the Financial Times and Bloomberg reported on Monday.
Earlier this month, Russian President Vladimir Putin said Russia could seize and nationalize the assets of foreign companies leaving the country.
A move by the UK government to put Gazprom Marketing & Trading Retail under special administration appears designed to save the company as its customers abandon it over the war in Ukraine, the Financial Times reported. Sources told Bloomberg on Monday that many major natural-gas traders had instructed staff not to deal with Gazprom's trading arm.
The CEO of Gazprom, Alexei Miller, is sanctioned by the UK government. Gazprom itself doesn't face restrictions.
Gazprom Marketing & Trading Retail — which supplies natural gas to about 30,000 UK business customers, or about 20% of the country's companies — has been trying to find a buyer for the business, The Times of London reported on Sunday. But a person close to the company told the Financial Times that it "would be difficult" to reach a deal.
If Gazprom Marketing & Trading Retail were to collapse, the UK government could find another supplier to take over its client base or nationalize the company, with taxpayers providing the funds to keep it running, the Financial Times reported. Its clients in the UK include McDonald's, Siemens, and the National Health Service, according to the BBC.
Gazprom did not immediately respond to Insider's request for comment.
An analyst told Insider that the Kremlin was likely to take issue with the nationalization of Gazprom in the UK and see it as a political move.
"It could escalate tensions between the West and Russia," said Nirgunan Tiruchelvam, the head of consumer sector equity research at Tellimer.
"The West needs to tread carefully given Russia's supply of gas to Europe," Tiruchelvam, who covers the commodity sector, added.
Some fear that the Kremlin may cut off its natural-gas supply to Europe to retaliate against sweeping Western sanctions. The International Energy Agency has said Europe last year imported about 40% of its gas from Russia.
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