The UK government could take control of the retail supply arm of Russian gas giant PJSC Gazprom within days, Sky News reported, citing an industry source.
Gazprom Marketing & Trading Retail Ltd (GM&T) is the supplier of more than a fifth of the UK’s commercial gas by volume and provides gas and electricity to more than 30,000 commercial customers in the UK, including parts of the NHS and local councils, via its Gazprom Energy unit.
READ: UK government may temporarily nationalise Gazprom's retail supply arm - reports
GM&T could be taken into public hands if it fails to reassure financial counterparties about the nature of an apparent change of ownership signalled by its parent company last week, Sky News reported. On Friday, PJSC Gazprom said it had "ceased its participation" in the British arm, but did not reveal details of any new owners.
The division's fate rested on ongoing talks between the company and Citi, which acts as its clearing bank, said one energy industry executive.
Also on Friday, Gazprom Energy reiterated that its parent company GM&T sources the gas supplied to Gazprom Energy’s customers from the wholesale energy markets and that it does not depend on gas supplies from Russia.
“Neither Gazprom Energy, nor GM&T, has been subject to any sanctions by the UK government,” it said in an update to a statement first published in February.
Bloomberg News estimated last month that it could cost about £4bn to maintain Gazprom Energy’s existing supply contracts, leaving taxpayers with another large burden following the collapse of utility Bulb Energy last year.
READ: Bulb Energy enters special administration as energy crisis continues