Germany is looking into the idea of a nationalization plan for the German companies that make up Russian energy giants Rosneft and Gazprom in the event that firms that are centrally important to the German energy market may run into financial difficulties, German business daily Handelsblatt reported this week, citing sources within the government.

The German Ministry of Economy is currently examining these radical steps considering the importance for both the German subsidiary companies of the two firms to the German market for energy. The Chancellor Olaf Scholz is also involved in discussions regarding the possibility of nationalizing the German subsidiaries of Rosneft along with Gazprom, Handelsblatt reported, Citing various government sources. Germany fears that it will be hit with a shortage of energy if these two companies face problems or fall into financial ruin since banks are avoiding from financing companies that are linked to Russia.

Gazprom Germania, based in Berlin is a major operator of gas storage facilities. Rosneft Deutschland is a key participant in the German market for gasoline, diesel and distribution of kerosene.

This week Germany prepared for a possible interruption the natural gas supplies to Russia in the wake of an emergency on Wednesday prior to the deadline of Thursday which Russian president Vladimir Putin had ordered for gas-for-ruble payment. Germany activated the emergency plans in the event that the gas supply from Russia is cut off. This plan could result in the rationing of gas supplies. Putin is putting a date of March 31 to the Russian government Gazprom along with the central bank in Russia to negotiate arrangements for the payment of rubles in countries that are referred to “hostile” countries.

German utilities had requested last week federal authorities establish an early alerts of a possible drop in gas supply, stating they have “serious indications that the gas supply situation is about to deteriorate.”

Europe as well as Germany continued to get Russian natural gas through pipelines on Friday in the wake of Putin declared to European countries with the threat that Moscow will cut off gas flow if buyers do not adhere to Russia’s demand for gas only by Thursday, March 31.

The options being considered could include the possibility of restructuring Wingas GmbH, which supplies around 20 percent in all German energy market. Other options include locating the right energy supplier for its customers, according to those who requested not to be identified as discussions are confidential. Berlin authorities are analyzing the impact that a possible collapse of Wingas will impact the economy, and no decision has been taken.

Gazprom subsidiaries across Europe are facing pressure because business partners and customers are refusing to do transactions with them. This is creating the possibility that some the companies won’t last. Germany is looking at either nationalizing or expropriating German companies of Gazprom along with Rosneft, Handelsblatt reported on Thursday, citing sources from the government. Gazprom Germania runs gas storage facilities and Rosneft Germany is responsible about 25% of German refinery industry, as per the report.

Certain banks are putting off transactions with Wingas and customers don’t want to contract for the firm, people told. The contracts previously signed are in effect. Wingas did not respond to emails or calls seeking information.

Assistance to Wingas will not be an easy endeavor. This is because the operations of the Gazprom group’s various businesses are interconnected. For example, the London-based trading division Gazprom Marketing and Trading that is responsible for Wingas’ hedges, as well as the energy that was previously purchased to provide customers. Without them, customers would be forced to pay current spot prices that are soaring.

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