The Hague council asks for permission to extend Gazprom contract

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The city council in The Hague has asked the government for permission to extend its contract with Russian state gas supplier Gazprom because it is unable to find an alternative.

Energy minister Rob Jetten ordered all municipalities to terminate their contracts with Gazprom Energy, the company’s Dutch-registered subsidiary, by October 10.

The Hague said its tendering process had so far failed to identify a suitable replacement and it would not be able to meet the government’s deadline. It has asked for an exemption from the sanctions on Russian energy until January 1.

Around 120 Dutch councils are estimated to be still searching for a replacement for Gazprom Energy, with the hugely inflated prices making the task even more challenging.

But Jetten said on Friday that he expected local authorities to stick to the deadline, even if it meant soaring gas bills this winter. ‘That is the price you have to pay for no longer filling the coffers of a warmongering dictator,’ he said.

He added that the sanctions still allowed European countries to import up to 10% of their gas from Russia, which currently supplies around 15% of the Netherlands’ gas demand.

German revenues

Gazprom Energy is one of a number of European subsidiaries linked to Gazprom Germania, which was put into long-term administration by the German government in May and renamed Securing Energy for Europe after Russia severed ties with the company.

Its revenues therefore go to the German government rather than Moscow, but Jetten has cast doubt about whether it is financially independent of Russia.

Some analysts told Nieuwsuur that Jetten’s demand to end contracts with Gazprom Energy may backfire, as many alternative suppliers still source their gas from Russia and will charge higher prices than the councils are currently paying.

‘If Dutch local authorities have to cancel their cheap contracts and replace them by buying gas at extremely high prices which will almost certainly be partly Russian, the Netherlands itself will run the risk of breaching the sanctions,’ lawyer Viktor Winkler told NOS.

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