Russia's gas giant Gazprom is reviewing how a potential 'hard' Brexit would impact its EU gas trading business which is currently carrying out in London, and whether it would affect its preferential access to the EU gas market, the Financial Times reported on Tuesday, citing two people familiar with a Gazprom review of its UK operations.
Following the triggering of Article 50 last week, with which the UK formally notified the EU of its intention to leave the bloc, politicians on both sides of the English Channel have signaled that negotiations would be difficult and the UK may leave the EU in two years without any preferential trade deal, in the so-called 'hard Brexit'. Fears over losing preferential access to the EU market are top concerns for many banks and financial institutions that are already mulling over the possibility of relocating out of London to Paris or Frankfurt.
Now, according to FT, Gazprom is also reportedly concerned with losing its preferential access to its biggest export market, the EU gas market.
"Running our European trading operations out of London is not advantageous any longer," one of FT's sources said.
Gazprom Marketing & Trading (GM&T) has been operating from London since it was set up as a Gazprom unit in 1999. GM&T is running all European natural gas and LNG operations from London, according to FT.
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The deputy head of Gazprom's management committee, Alexander Medvedev, said in a statement, as carried by Belfast Telegraph:
"The operations of Gazprom's London-based unit Gazprom Marketing and Trading are not affected by Brexit. GM&T operates worldwide, and focuses on trading, LNG and UK retail, while European business is mostly covered by the long-term contracts of Russian-based Gazprom Export."
A couple of months ago, Medvedev said that Gazprom's market share in Europe rose from 31 percent to 34 percent two years ago, and it is not about to change much in the coming years. In fact, he predicted that Gazprom's share in Europe will rise further to 35 percent.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More