Czech firm Net4Gas missing latest payments from Gazprom

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PRAGUE — Czech natural gas transmission system operator Net4Gas (N4G) has not received the latest monthly contracted payments from Russia’s Gazprom, a government minister said.

Net4Gas’s revenues from the contracts accounted for three quarters of total 2021 revenue, the company said in a filing late on Wednesday.

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“N4G is currently investigating the reasons for this non-payment, which in N4G’s view represents a contractual breach on the part of the major shipper,” it said.

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“N4G further notes that it is currently able to cover its ongoing operating and financing costs.”

The company did not name the shipper and did not comment further, but Industry and Trade Minister Jozef Sikela said late on Thursday he had met Net4Gas leadership to discuss the situation, and identified the counterparty as Gazprom.

“Russian abuse of energy sector as a weapon continues,” he said on Twitter. “Gazprom has stopped paying transit fees and is ths not meeting its commitments to Net4Gas.”

There was no identifiable impact on gas supplies to the central European country.

Net4Gas had been in the past shipping Russian gas from Germany through the Czech Republic to Slovakia and on to Austria. But since Russia’s invasion of Ukraine last year, Russian gas flows to Germany through the Nord Stream pipeline were reduced and eventually stopped, and the pipeline was damaged in September.

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Net4Gas has been shipping gas from alternative sources as ordered by its customers.

In October, Fitch Ratings agency affirmed N4G at ‘BB+’ and said its base scenario assumed “full or near-complete shut-off of Russian pipeline gas to Europe and no payments from Gazprom.”

“We see a material risk of the long-term ship-or-pay transit contracts between Net4gas and Gazprom not being fulfilled, due to the continuous escalation of sanctions and no Russian gas transit through the pipeline at present,” Fitch said in the Oct. 19 commentary.

The Czech Republic has scrambled to get alternative supplies through liquefied natural gas shipments and flows from Norway and elsewhere.

The country also shares routes with Slovakia, through which Russian gas still flows to Europe via Ukraine. Flows between Slovakia and the Czech Republic have been running in both directions depending on demand. No flows in the direction from Slovakia were nominated since the start of January. (Reporting by Jason Hovet and Jan Lopatka Editing by Mark Potter and Nick Zieminski)

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