Belfast Telegraph

Gazprom says operations 'not affected by Brexit' amid relocation fears

Russia's state-owned energy giant Gazprom has moved to quash speculation it is looking to relocate its London operations due to fears over trade barriers after Brexit.

The firm's deputy chairman said London-based Gazprom Marketing and Trading (GM&T), which takes part in the company's global trading, retail carbon and liquefied natural gas business, would not be impacted by Britain's divorce from the EU.

"The operations of Gazprom's London-based unit Gazprom Marketing and Trading are not affected by Brexit," Alexander Medvedev said in a statement.

"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.

"The announced Brexit has not impacted our activities on the UK gas market, neither the LNG portfolio."

His statement follows speculation Gazprom is considering moving GM&T operations out of London.

It has been reported a review was launched amid concerns over Brexit trade tariffs that could raise the cost of doing business with its most important export market, the EU.

GM&T was set up in London in 1999 and employs around 450 staff, while a further 100 employees are based at its site in Manchester, which focuses on retail operations, according to its website.

Gazprom's website identifies London as GM&T's headquarters, but lists other offices in France, Switzerland, Singapore and the US.

GM&T is owned by Gazprom Export, which falls under the Gazprom Group umbrella.

The parent company is more than 50% owned by the Russian state.

William Jackson, a senior emerging markets economist at Capital Economics, said Russian industry tends to rely far more on EU countries than the UK for trade, and that potential tariffs between the two may not bode well for business.

"Russia's exports to Germany are about three times as large as they are to the UK. It exports more to Italy than it does to the UK. Clearly it wouldn't be helpful if there were barriers," he said.

Terms of trading between the EU and Britain have yet to be set, but Mr Jackson noted that natural resources such as oil and gas more readily get a free pass between borders - which could be good news for Gazprom.

Taking a wider view of Russia's economic challenges, he said Brexit has fallen down the list of investor concerns compared with the prospect of oil prices, the country's fiscal and monetary policy, and international sanctions.

"There are a lot of problems for Russia's economy, this has sort of slipped off the radar a bit."