Just a few large European energy firms are still striking deals with the trading arm of Gazprom PJSC, as companies shun Russian business in response to the war in Ukraine, according to people familiar with the matter.
Nearly all the big companies that buy and sell gas have told their traders not to execute over-the-counter deals with Gazprom Marketing & Trading, according to the people. Among those still trading are France’s TotalEnergies and Engie, and Austria’s OMV, said the people, who asked not to be identified because the information is private. Some small players are still making transactions.
Trading firms have sought to cut ties with Russia as Europe seeks to diversify its gas supplies to punish President Vladimir Putin for the war in Ukraine. BP and Shell are moving to dump their stakes in Russian energy ventures, and while German utilities RWE, E.ON and Uniper are sticking with existing contracts, they aren’t signing new ones.
TotalEnergies and Engie declined to comment. OMV confirmed it’s still buying gas from the company. A spokesperson for Gazprom M&T didn’t reply to a request for comment. The company is still trading freely on the exchanges.
Europe relies on Russia for about a third of its gas, making it harder for the continent to fully cut its ties. While the European Union and the UK have implemented wide sanctions against Russia, energy has so far been left out. But traders are concerned that Gazprom’s trading arm, which also owns one of the UK’s top retail suppliers, could eventually be hit with restrictions.
Already Gazprom M&T’s central-London landlord, British Land Co, is planning to cut short its rental agreement, and the UK government is pressing public bodies that buy gas from Gazprom to find alternative suppliers.
Gazprom M&T opened its first office in London in 1999 and made more than 235 million pounds ($309 million) in profit in 2020, according to a regulatory filing. Its retail arm provides more than a fifth of the gas supplied to commercial firms in the UK and had over the past decade 127 million pounds worth of contracts with UK government bodies and agencies, including the National Health Service.
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