CELEX: 32013M6910
Language: en
Date: 2013-12-03 00:00:00
Title: Commission Decision of 03/12/2013 declaring a concentration to be compatible with the common market (Case No COMP/M.6910 - GAZPROM / WINTERSHALL / TARGET COMPANIES) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 3.12.2013
C(2013) 8848 final

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                                        To the notifying parties

Dear Sir/Madam,

Subject:    Case No COMP/M.6910 – GAZPROM / WINTERSHALL / TARGET COMPANIES
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004

 1) On 30.10.2013, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation[1] by
    which: (i) JSC Gazprom ("Gazprom", Russian Federation) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole ownership
    and control of the whole of the undertakings Wingas GmbH ("Wingas", Germany) and of Wintershall Erdgas Handelhaus  GmbH  &  Co.  KG  ("WIEH",
    Germany), and (ii) Gazprom and Wintershall Holding GmbH ("Wintershall", Germany) acquire joint control of Wintershall Noordzee B.V.  ("WINZ")
    and Wintershall Services B.V. ("Wintershall Services", both of the Netherlands and together referred to as the "Target Companies") by way  of
    an asset swap. Wingas and WIEH are currently jointly controlled by Gazprom and Wintershall, while WINZ and Wintershall Services are currently
    solely controlled by Wintershall[2] (Gazprom and Wintershall are designated hereinafter  as  the  'notifying  parties'  or  'parties  to  the
    proposed transaction').

       THE PARTIES

 2) Gazprom is a publicly listed company that is majority owned by  the  Russian  Federation.  Its  principal  activities  are  the  exploration,
    production, transportation, supply, trading, distribution, and storage of natural gas.

 3) Wintershall is a wholly-owned subsidiary of BASF SE ("BASF") and engages in the exploration and production of crude oil and  natural  gas  in
    particular in Europe, Northern Africa, South America and Russia, as well as in natural gas pipeline operation,  investment  and  natural  gas
    supply and storage.

 4) Wingas is a wholly-owned subsidiary of W&G Beteiligungs-GmbH & Co KG ("W&G")  which  is  currently  jointly  controlled  by  Wintershall  and
    Gazprom. Wingas is active in the downstream gas supply in Germany, Austria, the Czech Republic and several other Western European  countries.
    Wingas also offers natural gas storage in Germany and Austria through its subsidiary astora GmbH & Co. KG.

 5) WIEH, currently jointly controlled by Wintershall and Gazprom, purchases gas from [details of WIEH's suppliers] for  supply  to  [details  of
    WIEH's customers].

 6) WINZ and Wintershall Services are wholly owned subsidiaries of Wintershall. WINZ is engaged in oil and gas exploration and production in  the
    North Sea, principally in the Dutch sector but also in Denmark and the United Kingdom. Wintershall Services, in turn, provides platform staff
    and related services for WINZ.

       THE OPERATION

 7) The proposed transaction consists of the acquisition by Gazprom of sole control of Wingas and WIEH, as well as of the  acquisition  of  joint
    control by Gazprom and Wintershall of WINZ and Wintershall Services. This proposed transaction is based on  a  Basic  Swap  Agreement  of  14
    November 2012 by which Wintershall will be granted a 25% plus one share stake in Areas IV and V in the Achimov Formation of the  Urengoy  gas
    field in Western Siberia.

 8) Wintershall and Gazprom also jointly own and control a German  gas  transmission  business,  which  is  conducted  through  the  transmission
    operators GASCADE Gastransport GmbH, OPAL Gastransport GmbH & Co. KG, and NEL Gastransport GmbH. This transmission business is  not  included
    in the Transaction and will remain jointly owned and controlled by Wintershall and Gazprom.

       THE CONCENTRATION

 9) The proposed transaction will result in Wingas and WIEH being solely controlled by Gazprom, as opposed to the pre-merger situation, in  which
    both companies are jointly controlled by Gazprom and Wintershall. Also, WINZ and Wintershall Services will be jointly controlled  by  Gazprom
    and Wintershall, as opposed to the current sole control exerted over these companies by Wintershall. Both the acquisition by Gazprom of  sole
    control of Wingas and WIEH as well as the acquisition by Gazprom and Wintershall of joint  control  of  WINZ  and  Wintershall  Services  are
    legally interdependent and therefore constitute a single concentration within the meaning of the Merger Regulation.[3]

10) The acquisition by Wintershall of a 25% plus one share stake in Areas IV and V in the Achimov Formation of the Urengoy gas field  in  Western
    Siberia (the "Siberian Assets") does not, in itself, constitute a concentration within the meaning of the  Merger  Regulation.  Even  if  the
    minority interests were to confer joint control over the aforementioned assets on Wintershall, the  requirements  for  constituting  a  full-
    function joint venture will not be met. The Siberian Assets are currently not in commercial production and therefore they do not have  access
    to the market. Also, post-merger, [details on sales arrangements of the future output of the Siberian Assets][4].[5] Accordingly, given  that
    this particular joint venture will neither play an active role on the market post-merger, nor involve a structural change in the  market,  it
    cannot be considered a full-function joint venture within the meaning of Article 3(4) of the Merger Regulation.[6]

    Joint control – WINZ and Wintershall Services

11) WINZ and Wintershall Services will be jointly controlled by Gazprom and Wintershall. The Basic Swap Agreement  prescribes  that  Gazprom  and
    Wintershall will have "equal control and other rights with regard to WINZ and Wintershall Services".[7] The Parties also indicate  that  none
    of the provisions that will ultimately be incorporated into the shareholders agreements of WINZ and Wintershall  Services  respectively  will
    prevent either Gazprom or Wintershall from exercising joint control over WINZ and Wintershall Services.[8]

    Joint to sole control – Wingas and WIEH

12) Gazprom and Wintershall currently (indirectly) hold 49.98% and 50.02% respectively of the share capital of Wingas, while  both  hold  50%  of
    the share capital of WIEH. As will be explained below, the Parties therefore currently exercise joint control over both Wingas and WIEH.

13) WIEH currently constitutes a 50/50 joint venture between Gazprom and Wintershall.  The  proposed  transaction  foresees  the  acquisition  by
    Gazprom of the remaining 50% stake in WIEH.[9]

14) Although currently the respective shareholdings of Wintershall and Gazprom in Wingas differ slightly, both companies are equally  represented
    on both the management as well as the advisory board.[10] The fact that Wintershall has a casting vote at the level of the  management  board
    does not impair on the current existence of joint control on the part of Gazprom and Wintershall, given that all decisions that relate to the
    strategic conduct of Wingas are subject to approval of the advisory board, at which level no party holds any casting  vote.[11]  Although  in
    the event of a deadlock all decisions of the advisory board can ultimately be referred to the shareholders' meeting, Gazprom  still  holds  a
    veto right at the latter level as regards strategic decisions relating to [description of Wingas' strategic decision-making  process].  As  a
    practical matter, the Parties have confirmed that [details on Wingas' decision-making process]. Finally, in practice, Gazprom plays a central
    role in the effective operation of Wingas as it supplies over […]% of Wingas' overall gas sourcing portfolio, while its executives on Wingas'
    executive board are in charge of the core fields [details on Wingas' decision-making process].

    Full-functionality

15) WINZ and Wintershall Services both constitute pre-existing legal entities to which  a  turnover  can  be  clearly  attributed[12]  and  which
    perform all of the functions which are  normally  carried  out  by  undertakings  operating  on  the  same  market.  Moreover,  even  if  the
    aforementioned companies would no longer be considered full-function after the transaction, the acquisition of  joint  control  of  these  by
    Gazprom will in any case lead to a structural change in the market.[13]

16) In light of the above, the transaction constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

17) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (Gazprom: EUR […] million; BASF:  EUR
    72 129 million; WINZ/Wintershall Services: EUR […] million; Wingas: EUR […] million; WIEH: EUR […] million).[14] Each of them has an  EU-wide
    turnover in excess of EUR 250 million (Gazprom: EUR […] million; BASF: EUR […] million; WINZ/Wintershall Services: EUR […]  million;  Wingas:
    EUR […] million; WIEH: EUR […] million), but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and  the
    same Member State. The notified operation therefore has an EU dimension.

       COMPETITIVE ASSESSMENT

18) Gazprom is primarily active in the exploration and production of gas, as well as in the upstream supply of natural  gas,  with  more  limited
    activities in downstream gas supply and gas storage. Wingas is mainly active in downstream wholesale gas supply, retail gas supply  to  large
    industrial end-customers and power plants, and gas storage.

19) The proposed transaction gives rise to a number of horizontally and vertically affected markets in Germany, Austria and the Czech Republic.

1 Overview of relevant markets in the gas supply chain

20) Given that Parties are active in storage and in several levels of the gas supply chain, a brief overview of  the  main  general  features  of
    those markets is outlined below.

21) Gazprom is active in the exploration and  production  of  natural  gas  resources,  [description  of  Gazprom's  exploration  and  production
    activities]. These can be distinguished depending on the method of production.[15] In addition, depending on its origin, natural gas may have
    a high calorific value (“H-gas”) or a low calorific value (“L-gas”).

22) Both Parties also own gas storage facilities which are used as a flexibility tool to balance fluctuations in demand  of  natural  gas.  Other
    such tools are for example flexible supply contracts and flexible purchasing contracts. Regarding storage,  there  can  be  pore  and  cavern
    storage facilities. Pore storage refers to storage in underground layers of porous rock, which usually are located in  depleted  natural  gas
    fields. These depleted fields are, after the completion of certain technical  conversion  steps,  artificially  re-filled  with  natural  gas
    volumes for storage. Cavern storage facilities are underground cavities which have been artificially created.

23) Gazprom is active in the upstream supply of gas and, together with other upstream producers like Gasterra,  Statoil,  Dong,  Eni  and  Shell,
    typically supplies volumes of gas to wholesalers, which acquire said volumes for onward sale into downstream markets.

24) On the downstream markets, wholesalers, such as E.ON, Wingas, RWE, VNG, Exxon Mobil  and  Erdgas  Münster,  that  procure  natural  gas  from
    producers, sell the natural gas volumes on to (i) other resellers (wholesale supply), which in turn supply end-customers (retail supply)  and
    may also sell directly to (ii) end-customers.

25) The downstream supply markets can entail several levels and/or sub-segments. For example, in  Germany  the  supply  chain  was  traditionally
    considered to comprise two wholesale levels and several retail segments. In fact, the market participants on the wholesale downstream  supply
    markets of gas (the supply to resellers) have traditionally been split into (i) supra-regional wholesalers;  (ii)  regional  wholesalers  and
    (iii) distributors, as will be described in detail below.

26) Natural gas is either shipped to wholesalers through high-pressure transmission pipelines or by boat in the form  of  liquefied  natural  gas
    (“LNG”). LNG is transported over long distances, where pipelines are often neither economic nor feasible. At the receiving  location,  liquid
    natural gas is re-gasified and then fed into transmission pipelines.

27) It is also important to note that supply relationships between upstream producers and  wholesalers  on  the  upstream  wholesale  market  are
    historically characterized by long-term contracts ("LTCs") including large Take-or-Pay (ToP) volumes, which  need  to  be  off-taken  by  the
    customer irrespective of market conditions. For example, in Germany most of Gazprom's non-Wingas  supplies  are  [details  on  the  term  and
    pricing structure of Gazprom's LTCs with German customers].

28) At the same time, increasingly liquid trading hubs are developing in various North Western  European  countries,  such  as  in  Germany.  The
    German gas trading hubs NCG and GASPOOL are virtual market places, each covering one market area, where gas is physically delivered and  off-
    taken, as well as financially traded, both bilaterally (OTC) and at the exchange (EEX-Exchange). At these hubs, gas producers, downstream gas
    wholesalers and retailers as well as certain industrial customers can both physically as well as financially trade gas.  Following  increased
    liquidity during the last years, gas prices at the German virtual trading hubs have been  below  LTC  prices,  exerting  pressure  on  German
    wholesalers that are committed to off-take their respective ToP-volumes. This, in turn, has led those wholesalers to making pressure  to  re-
    negotiate the terms of their LTCs with upstream suppliers.

2 Horizontal relationships

29) The Parties' activities overlap in a number of product market segments and therefore, the proposed transaction  gives  rise  to  horizontally
    affected markets in the markets for the supply of gas storage capacity in (a) Germany, and in (b) Austria.

1 Gas storage

1 Relevant product and geographic market

30) The Commission has previously defined a separate relevant product market for the storage of natural  gas,[16]  while  considering  a  further
    distinction between pore and cavern storage facilities[17] as well as between storage facilities suited for the storage of H-gas and  storage
    facilities suited for the storage of L-gas. The Commission has however ultimately left the latter questions open.[18][19]

31) The Parties argue that the relevant product market for natural  gas  storage  encompasses  all  types  of  storage  facilities,  if  not  all
    flexibility tools, and should not be further segmented.[20]

32) Insofar as the possible distinction between pore and cavern storage facilities is concerned, the market  investigation  carried  out  by  the
    Commission showed that the respondents on both the supply as well as the demand side of the market appear to  consider  these  two  types  of
    storage facilities as belonging to the same relevant product market. In any event, for the purposes of this decision, the  exact  delineation
    of the gas storage market can be left open as the proposed transaction will not give rise to serious doubts as to its compatibility with  the
    internal market, irrespective of the market definition retained.

33) As regards a possible distinction between storage facilities suited for H-gas and those suited for L-gas, the market  investigation  provided
    some indications that the interchangeability of H-gas storage facilities with L-gas storage facilities in Germany  and  Austria  follows  the
    existing degree of interchangeability between H-gas and L-gas. The overall interchangeability of H-gas and L-gas is dealt with in more detail
    in section 5.3.5.1, below.

34) As regards the interchangeability of H-gas and L-gas storage facilities in particular, the majority  of  respondents  believed  that  in  the
    absence of a conversion fee for quality conversion between H-gas and L-gas, storages of both gas qualities would belong to the same  relevant
    product market. Given that in Germany this conversion fee will cease to exist  as  of  2016,  due  to  its  incorporation  into  the  general
    transmission (entry/exit) tariff charged to all operators, storage facilities of both types may indeed belong to the  same  relevant  product
    market in the near future.

35) As regards the geographic scope of the market for the storage of natural gas, the Commission previously defined it to be either  national  or
    regional, while keeping account of a potential broadening in view of the liberalization of this sector in Europe.[21] As regards Germany, the
    Commission specifically considered the geographic market to encompass an area with a radius of (i) 200 km around  the  storage  facility  for
    pore storages and (ii) 50 km around the storage facility for cavern storages.[22]

36) The Parties claim that the market for storage is least national in scope[23] and, in the case of Germany, should include the  Haidach  and  7
    fields facilities which are located in Austria but which are connected to the German grid.[24] This view was confirmed by the large  majority
    of the respondents as regards both Germany and Austria.

37) In any event, for the purposes of this decision, the exact delineation of the relevant product markets can  be  left  open  as  the  proposed
    transaction will not give rise to serious doubts as to its compatibility with the internal market,  irrespective  of  the  market  definition
    retained.

2 Competitive assessment

38) Taking into account the various possible  delineations  of  the  relevant  product  and  geographic  markets  set  out  above,  the  proposed
    concentration would give rise to several horizontally affected markets for the supply of gas storage capacity in both  Germany  and  Austria.
    Following the proposed transaction, both the Parties' combined market share as well as the increment in  their  existing  significant  market
    shares in Germany and Austria respectively would be most significant in the markets for: (i) H-gas pore storage in Germany[25], and; (ii)  H-
    gas storage in a 200 km radius around the Haidach facility in Austria (serving Austrian demand)[26]. The Parties combined presence  in  these
    markets would amount to (i) [40-50]% (Gazprom: [10-20]%; Wingas: [30-40]%), and to (ii) [50-60]% (Gazprom: [30-40]%;  Wingas:  [10-20]%).  In
    Germany, the Parties' competitors on the H-gas pore storage market include E.ON Gas  Storage  ([20-30]%  market  share),  Storengy  ([5-10%]%
    market share), VNG Gasspeicher ([5-10]% market share) and RWE ([0-5]% market share). In Austria, the Parties' competitors on the  market  for
    the H-gas storage in a 200 km radius around the Haidach facility in Austria (serving Austrian demand) are RAG ([20-30]%), EON ([20-30]%)  and
    OMV ([5-10]%). As will be explained below, the proposed transaction however does not give rise to serious doubts as to its compatibility with
    the internal market and the precise definition of the relevant product and geographic markets can, therefore, be left open.

39) The Parties submit that these horizontal overlaps are unlikely to give rise to competitive concerns. They argue that Gazprom did not  receive
    any third-party bookings for its storage capacity in neither Germany nor Austria during at least the period 2010-2013,  while  only  offering
    […]% of its total capacity to the market. Indeed, Gazprom indicates that it used […]% of its German and Austrian storage capacity  internally
    during the period mentioned. Similarly, Wingas used around […]% of its overall German and Austrian storage  capacity  internally  during  the
    same period. The competitive pressure exerted between the Parties is therefore currently highly limited.[27]

40) The market investigation provided some indications to support the Parties' claims in this regard;  firstly,  the  majority  of  the  Parties'
    German and Austrian customers explained that they generally source storage capacity from multiple storage operators and that they are capable
    of switching between suppliers, depending on the terms of the contract; secondly, the market investigation only identified  one  customer  in
    Austria and two customers in Germany that actively sourced storage capacity from both the Parties during  the  past  3  years.  Both  of  the
    aforementioned customers however considered the Parties' storage capacity interchangeable with other operators' German facilities,  and  that
    switching between suppliers is feasible.

41) Also, respondents on both the supply and the demand side of the market generally considered demand for gas storage to currently be low,  with
    the large majority of the Parties' competitors expecting this situation to  continue  for  the  relevant  timeframe  for  EU  merger  control
    purposes, due for example to excess capacity and a limited spread between the price for gas in summer and its price in  winter.[28]  The  low
    demand for storage further reduces the significance of the Parties' already limited  freely  available  storage  capacities  in  Germany  and
    Austria.

42) Furthermore, some competitors will, post-merger, continue to exert competitive pressure on the Parties  in  both  Germany  and  Austria.  The
    majority of respondents to the market investigation confirmed the existence of excess capacity and low demand for the gas storage  sector  in
    Germany and Austria.

43) Finally, none of the supply- and demand-side respondents to the market investigation expect the proposed transaction  to  have  any  negative
    impact on either the price or the availability of natural gas storage capacity, neither in - H-gas, pore facilities – Germany nor in Austria.

44) Given the limited share of customer demand that is attributable to the Parties' respective storage facilities, the  limited  overlap  between
    the Parties' commercial gas storage activities and the excess capacity and currently limited demand in both Austria and Germany, the proposed
    transaction is unlikely to give rise to serious doubts as  to  its  compatibility  with  the  internal  market,  insofar  as  the  horizontal
    relationship between the Parties' gas storage activities is concerned.

3 Vertical relationships

45) The proposed transaction would give rise to vertically affected markets involving (i) the  exploration  of  oil  and  gas  and  the  upstream
    wholesale supply of gas, (ii) Gazprom's German gas infrastructure and the supply of gas, (iii) the supply of gas  storage  capacity  and  the
    supply of gas, (iv) the upstream supply of gas and the downstream wholesale and  retail supply of gas  in  (a)  Austria  and  (b)  the  Czech
    Republic, and (v) the upstream supply of gas and the downstream wholesale and  retail supply of gas in Germany.

1 Exploration of oil and gas - Upstream wholesale supply of gas

1 Product and geographic market definition

46) In its previous decisional practice, the Commission concluded that a single product market for the exploration of crude oil and  natural  gas
    exists, as the contents of underground reservoirs cannot be known at the stage of the exploration.[29]

47) This market is generally taken to be worldwide in scope, given that the  companies  engaged  in  exploration  do  not  tend  to  limit  their
    activities to a particular geographical area.[30]

48) In any event, for the purposes of this decision, the exact delineation of the relevant product markets can  be  left  open  as  the  proposed
    transaction will not give rise to serious doubts as to its compatibility with the internal market,  irrespective  of  the  market  definition
    retained.

2 Competitive Assessment

49) The vertically affected markets involving the worldwide market for exploration of oil and gas and the upstream wholesale gas  supply  markets
    are unlikely to give rise to serious doubts as to their compatibility with the internal market, given that these vertical  relationships  are
    almost entirely pre-existent to the proposed transaction. The addition of WINZ by the proposed transaction only  involves  a  highly  limited
    increment in Gazprom's current share ([0-5]%) of the exploration market, only amounting to [0-5]%.

2 Gazprom's German gas infrastructure – Supply of gas in Germany

50) Gazprom is involved in the transmission of  gas  in  Germany,[31]  which  is  carried  out  by  the  transmission  system  operators  GASCADE
    Gastransport GmbH ("GASCADE"), OPAL Gastransport GmbH & Co. KG ("OPAL") and NEL Gastransport GmbH ("NEL",  and  together:  the  "Transmission
    Business").

51) Although the transportation of gas can be considered  vertically  related  to  the  (wholesale  and  retail)  supply  of  gas,  the  proposed
    transaction will not alter the degree of control exerted by Gazprom over the Transmission Business, following a carve-out. At the same  time,
    Wintershall, which owns the Transmission Business together with Gazprom, will no longer be active in the  German  gas  supply  markets  post-
    transaction. The Proposed Transaction should therefore, if anything, reduce the incentive of GASCADE, OPAL and  NEL  to  offer  any  form  of
    preferential treatment to Wingas.

52) The proposed transaction cannot, therefore, give rise to serious doubts as to its compatibility with the  internal  market,  insofar  as  any
    potential vertically affected market involving the Transmission Business is concerned.

3 Supply of gas storage capacity – Supply of gas

53) As explained in paragraph (31) – (37) above, given that the gas storage capacity constitutes a flexibility-tool which  can  be  used  by  gas
    (wholesale and retail) suppliers to address fluctuations in demand, it can be considered an  input  to  (wholesale  and  retail)  gas  supply
    operations. Potential concerns in relation to the horizontal increment in market shares in gas storage  have  been  dealt  with  above  under
    points 5.2.1.2. However, the strengthened position in gas storage, as well as the move from  joint  to  sole  control  over  Wingas's  supply
    activities, also needs to be considered in view of their vertical relationship. Any potential concern of  a  vertical  nature  involving  the
    Parties' gas storage facilities would either relate to (i) input foreclosure, or (ii) customer foreclosure.

54) As indicated above, only […]% and around […]% of Gazprom's and  Wingas'  respective  gas  storage  facilities  in  Germany  and  Austria  are
    available for third party bookings, with Gazprom not having received any such bookings during 2010-2013. The Parties' available  gas  storage
    capacity thus maximally represents [5-10]% of overall storage capacity in Austria[32] and [0-5]%  of  overall  H-gas  storage  facilities  in
    Germany[33]. The size of the storage capacity that the Parties could therefore, hypothetically, foreclosure access to is  very  limited.  The
    Parties also indicate that their main competitors on the downstream gas supply markets in Germany and Austria are  similarly  self-sufficient
    as regards their gas storage requirements and do not source any gas storage capacity from the Parties. The respondents  to  the  Commission's
    market investigation also pointed to the existence of a regulatory regime requiring non-discriminatory and transparent access to gas  storage
    facilities, which applies to the Parties' gas storage activities in both Germany and Austria.

55) Regardless of whether one takes account of available storage capacity only or overall existing storage  capacity,  the  proposed  transaction
    does not involve a significant competitive overlap nor does it significantly increase the degree of concentration, given  Gazprom's  existing
    joint control over Wingas combined with the fact that Gazprom did not have any third-party  bookings  for  its  storage  capacity  in  either
    Austria or Germany during 2010-2013.

56) The current and expected future low demand and combined excess capacity in both the  German  and  Austrian  gas  storage  market  furthermore
    indicate that gas storage facilities currently do not constrain the ability to conduct downstream gas supply operations.[34]

57) As regards the potential for the Parties to engage in customer foreclosure in Germany, it is important to note that in Germany in  2012,  the
    Parties only sourced a very limited amount of gas storage capacity (around […] mcm, or less than […]% of  overall  German  storage  capacity)
    from third parties. Accordingly, the Parties cannot be considered an important customer on the gas storage markets in  Germany,  as  required
    for customer foreclosure to be of concern.[35] Furthermore, as regards Austria, Gazprom only sourced storage capacity from [details of third-
    party suppliers] between at least 2010 and 2012. Notwithstanding the size  of  Gazprom's  third-party  gas  storage  capacity  bookings,  the
    Parties' unbooked storage capacity in Austria is insufficient to accommodate Gazprom's gas storage sourcing  requirements.  In  other  words,
    even if Gazprom would post-merger attempt to rely on Wingas for its gas storage requirements in Austria, it would still need to  source  most
    of its current demand from third-parties.[36]

58) Finally, as already indicated above, none of the respondents to the  market  investigation  expect  the  proposed  transaction  to  have  any
    (negative) impact on either the price or the availability of natural gas storage capacity, neither for H-gas, pore facilities in Germany  nor
    in Austria.

59) Based on the foregoing, the vertical relationships related to the Parties' gas storage activities in Austria and Germany do not give rise  to
    serious doubts as to their compatibility with the internal market.

4 Upstream wholesale gas supply - downstream wholesale and retail supply of gas – Austria and the Czech Republic

1 Product and geographic market

    Downstream wholesale gas supply - Austria and the Czech Republic

60) As described above, the downstream wholesale supply of gas means the business activity  of  wholesalers  procuring  gas  from  producers  for
    resale to other wholesalers or distributors. However, the Commission has left open the question of the sub segmentation of the product market
    definition in the case of the Czech Republic.[37]

61) The Parties submit that the product market in both these countries should be the wholesale supply of natural gas to  resellers  and  that  no
    further sub-segmentation should be considered.[38]

62) As to the geographic market, the Commission has generally considered downstream  wholesale  gas  markets  to  be  delineated  along  existing
    (regional) grid areas, by market area or at a national level.[39] However, the Commission has left the geographic market definition  open  in
    the case of the Czech Republic.[40]

63) The Parties submit that the geographic market comprises at least the territory of each  Member  State  given  the  fully  interconnected  gas
    infrastructure, the fact that wholesalers are active across the whole of each country and no physical or other barriers exist  to  distribute
    gas within the national territories, as well as no material price differences across the national territories.

64) In any event, for the purposes of this decision, the exact delineation of the relevant product and geographic markets can  be  left  open  as
    the proposed transaction will not give rise to serious doubts as to its compatibility with the internal market, irrespective  of  the  market
    definition retained.

    Retail gas supply - Austria

65) The Commission has previously generally distinguished between the following types of gas supplies: (i) the supply of gas to  gas-fired  power
    plants, (ii) the supply of gas to large industrial customers, (iii) the supply of gas to small industrial and commercial customers, and  (iv)
    the supply of gas to household customers.[41]

66) The Parties submit that it may be appropriate to define two distinct markets for gas supply to (i) large  industrial  customers  with  annual
    demand exceeding 500 000 m3 and (ii) to power plants.[42]

67) As to the geographic market definition, the Commission generally held the view of considering retail gas supply  as  national  in  scope,[43]
    whilst also considering a sub-national regional[44] delineation, depending on the specific Member State. As regards household customers only,
    the Commission has generally considered sub-national regional markets.[45] The Parties agree with a national delineation.

68) In any event, for the purposes of this decision, the exact delineation of the relevant product markets can  be  left  open  as  the  proposed
    transaction will not give rise to serious doubts as to its compatibility with the internal market,  irrespective  of  the  market  definition
    retained.

2 Competitive Assessment

69) As regards both Austria and the Czech Republic, it is important to note  that  Gazprom  is  already  vertically  integrated  as  regards  its
    upstream and downstream wholesale supply activities. Indeed, in Austria Gazprom is already active at the downstream  wholesale  supply  level
    through its wholly owned subsidiary GWH Gashandel, while in the Czech Republic Gazprom already operates at  the  downstream  wholesale  level
    through Vemex.[46] Furthermore, Gazprom today already exercises joint control over Wingas. The proposed transaction therefore only marginally
    increases the existing degree of vertical integration. Given that the shares of GWH Gashandel and Vemex  furthermore  will  account  for  the
    largest part of the merged entity's downstream presence in both Austria and the Czech  Republic,  these  vertical  relationships  are  almost
    entirely pre-existent to the proposed transaction.

70) As regards Austria in particular, Wingas is currently only marginally active in the downstream wholesale supply of  gas  and  in  the  retail
    supply of gas to large industrial customers, achieving respective market shares of [0-5]% and [0-5]% in 2011. The increment brought about  by
    the proposed transaction is therefore very limited. Moreover, although Wingas' and GHW Gashandel's combined  share  of  the  market  for  the
    downstream wholesale supply to resellers amounts to [10-20]%,[47] this segment is led by the incumbent Econgas, which has a market  share  of
    around [60-70]%. Moreover, post-merger, several additional competitors will continue to exercise some competitive pressure  on  the  Parties,
    such as E.ON ([10-20]%) and OMV ([10-20]%).

71) With respect to the Czech Republic and based on 2011 data provided by the Parties[48], Wingas currently only accounts for  a  marginal  share
    of the downstream wholesale gas supply market, amounting to less than [0-5]%. Again, the increment brought about by the proposed  transaction
    is therefore very limited. Moreover, Wingas' and Vemex's combined share of the market for the downstream wholesale gas  supply  to  resellers
    only amounts to [5-10]% while this segment is led by the incumbent RWE Group, which has a [60-70]% market share.[49].  Finally,  post-merger,
    several other competitors that together account for around [30-40]% of the market will continue  to  exercise  competitive  pressure  on  the
    Parties.

72) In light of the foregoing and the fact that Wingas was already jointly controlled by Gazprom, the proposed transaction is  unlikely  to  give
    rise to serious doubts as to its compatibility with the internal market, as regards the vertical relationships between the Parties'  Austrian
    and Czech gas supply activities.

5 Upstream supply of gas - Downstream wholesale and retail supply of gas in Germany

1 Product and geographic market

H- and L-gas

73) Two types of natural gas are consumed in Germany, France, Belgium and the Netherlands: H-gas and L-gas. H-gas is produced around  the  world,
    whereas L-gas is only produced in the Netherlands and in Northern Germany.

74) H-gas has higher methane content and thus a higher calorific value than L-gas. Due to this difference in heating value, H-gas and  L-gas  are
    not directly interchangeable. Pipelines can only carry either H-gas or L-gas at any one time. This  has  resulted  in  distinct  transmission
    networks for the two types of gas. However, should it be necessary, H-gas can be physically converted into L-gas and vice versa.

75) The Commission has previously considered a distinction between high calorific value gas ("H-gas") and low calorific value  gas  ("L-gas")  at
    each level of the gas supply chain, as well as in respect of gas transmission and gas distribution services.[50] The  market  definition  was
    however ultimately left open, save with respect to Belgium and France, where the Commission found that H-gas and L-gas do not belong  to  the
    same product market.[51]

76) The Parties submit that on none of the gas supply markets in Germany a distinction between H- and L-gas would be warranted,  given  that  the
    use of L-gas is rather limited, as both types of gas are only used in 4 countries throughout the entire EEA[52] and only produced in  Germany
    and the Netherlands. The Parties claim that, even though the two types of gas have somewhat  different  specific  technical  characteristics,
    they serve the same purpose, can be easily converted, and are subject to the same competitive conditions. In addition, their argumentation is
    based on a recent Federal Cartel Office ("BKartA") Decision, which found for L- and H-gas to be part of the same relevant product markets  in
    Germany.[53]

77) Currently, there exist two market areas for gas in Germany, which are both cross-quality, meaning that there are transmission grids both  for
    H- as well as L-gas. If a market participant wants to convert the gas quality supplied, this incurs a conversion fee, which differs depending
    on the market area. The current conversion fees amount to 0.6 EUR/MWh in the NetConnect Germany ("NCG") market area[54] and 1.18  EUR/MWh  in
    the GASPOOL market area[55] and will be gradually reduced until full socialization, meaning that the  overall  cost  of  conversion  will  be
    integrated into the transmission tariffs.

78) According to the majority of the Parties' upstream competitors, downstream wholesale as well as  retail  competitors,  wholesale  and  retail
    customers, and the TSOs in Germany, H-gas and L-gas are generally interchangeable. Indeed, a majority of wholesale  as  well  as  retail  gas
    supply customers expressed that they would consider partially switching between the two types of gas for their  German  gas  requirements  in
    case of a non-transitory price increase of 5 – 10%.

79) The market investigation showed that currently there are still some factors that limit the interchangeability of H-gas and L-gas in  Germany,
    since there is little evidence of past switching on the demand side of the wholesale gas supply[56]  and  there  are  indications  that  some
    technical constraints exist that could limit the interchangeability.[57]

80) The market investigation also showed that technical conversion for gas already occurs both at converter stations located on the  Dutch-German
    border, by the Dutch TSO, as well as in the NCG market area, by Open Grid Europe [...].[58] However, most German TSOs indicated that although
    technical conversion is possible in theory, the overall technical conversion capacity in Germany is currently limited.[59] Virtual conversion
    also occurs both in GASPOOL and NCG.[60]

81) In any event, the market investigation showed strong indications that H-gas and L-gas will be considered interchangeable by 2016, given  that
    the majority of the Parties' upstream competitors, downstream wholesale as well as retail competitors and customers, and the TSOs in  Germany
    foresee that the entire conversion fee is to be included into the standard transmission fee charged to all operators.

82) Overall, there are strong indications that H-gas and L-gas do have slightly different technical characteristics, but in light of declining L-
    gas production and the socialization of the German conversion fee in 2016, the two types of gas are likely to be part  of  the  same  product
    market at that point in time. Whether they already form a single product market, can however be  left  open,  as  even  under  the  narrowest
    conceivable market definition, there are no serious doubts as to the compatibility of the transaction with the internal market.

Upstream gas supply

83) In previous decisions, the Commission has defined a single product market for development, production and upstream supply of natural  gas  to
    large importers/wholesalers and has found that such a market is distinct from the market for the exploration  of  oil  and  natural  gas.[61]
    Furthermore, the Commission has considered, whether piped gas and LNG should be part  of  distinct  markets[62].  With  regard  to  LNG,  the
    Commission has previously concluded that in countries where import infrastructures for  LNG  are  present,  LNG  would  constitute  a  direct
    competitive constraint to gas imported via pipelines.[63]

84) The Parties submit that the upstream gas supply market comprises the development, production and upstream supply of  natural  gas  both  from
    conventional and unconventional sources and that no further distinctions should be made between piped gas and LNG,  basing  themselves  on  a
    recent BKartA decision's finding of a single product market without further distinctions.[64]

85) In the market investigation, the majority of respondents on both the demand as well as the supply side confirmed that the upstream  wholesale
    gas supply is a separate market.

86) With respect to the geographic market, in recent decisions the Commission has considered that the markets could be defined as  national  from
    a supply side perspective, due to limited interconnection infrastructure or lack  of  available  cross-border  capacity.[65]  To  assess  the
    relevant geographic market, the Commission takes into account that a market may be narrower in scope due to  the  technical,  commercial  and
    regulatory constraints of transporting gas from one area to a neighbouring one.

87) The Parties submit that the market is EEA-wide, including all imports, but that, given  the  absence  of  competition  concerns,  the  market
    definition can be left open.

88) The majority of respondents from the market investigation, on both the supply as well as the  demand  side  of  the  upstream  wholesale  gas
    supply market, indicated that Germany forms part of a regional geographic market rather  than  the  entire  EEA  territory.  Most  respondent
    considered this regional market to encompass several EEA Member States (in  particular  Germany,  Belgium  the  Netherlands  and  the  United
    Kingdom).

89) Also, participants active in Germany on the demand side of the upstream wholesale gas supply market indicated a capability of sourcing  their
    gas directly from at least one of the United Kingdom, the Netherlands or Norway. At the same time, upstream  producers  confirmed  that  they
    would divert volumes to Germany, away from at least the Netherlands, in the event of a non-transitory, significant  increase  of  German  gas
    prices.

90) Finally, there are no indications of  restricted  interconnection  capacity  restraining  the  amount  of  gas  that  can  flow  between  the
    Netherlands, Norway and Germany and there appears to be an increasing price convergence between the gas prices quoted at the gas trading hubs
    located in this putative regional gas market.[66]

91) In any event, for the purposes of this decision, the exact delineation of the relevant product and geographic market can be left open as  the
    proposed transaction will not give rise to serious concerns as to its compatibility with the internal market,  irrespective  of  the  precise
    product and geographic market definition retained.

Downstream wholesale gas supply

92) Within the downstream wholesale gas supply in Germany, the  Commission  has  traditionally  identified  two  levels:  (i)  the  long-distance
    wholesale supply to regional wholesalers, (ii) the supply to distributors, which is sub-segmented  into  (a)  long-distance  and  (b)  short-
    distance.[67]

93) The Parties generally concur with the distinction of levels, but do not agree on the  sub-segmentation  of  the  market  for  the  supply  to
    distributors into long-distance and short-distance supplies.

94) Although the majority of the respondents to the market investigation on the upstream and downstream wholesale gas  supply  levels  considered
    the downstream wholesale gas supply to constitute a separate relevant market, some indications pointed towards the existence of  one  overall
    wholesale gas supply market in Germany, on which both producers and non-producers compete.

95) The vast majority of customers and competitors both at the upstream wholesale and downstream wholesale gas supply  levels  indicated  that  a
    distinction between (i) supra-regional wholesale supply to regional wholesalers and (ii)  supra-regional  wholesale  supply  to  distributors
    (following market liberalisation) no longer applies.

96) With respect to the geographic market, the Commission has traditionally considered this to be  a  regional  market  comprising  the  existing
    (regional) grid areas (established sales regions).[68] Recently, it has also  considered  a  delineation  by  market  area  and  by  country,
    ultimately leaving this question open.[69]

97) The Parties submit that the market is national in scope. They claim that the traditional approach  should  be  revised  in  light  of  recent
    regulatory changes.[70] They also point to a recent decision by the German FCO, indicating a national market  delineation,  even  though  the
    question was finally left open.[71]

98) In the market investigation, the large majority of competitors and customers active on the upstream and downstream wholesale  gas  supply  as
    well as the competitors on the retail gas supply markets considered the geographic scope of the downstream wholesale gas supply market to  at
    least encompass the entire German territory.

99) The product and geographic market definition can however be left open, as with respect to the  present  transaction  no  competition  concern
    arises under any conceivable market definition.

Retail gas supply

100) The retail sale of natural gas refers to the sale of natural gas to final customers. The Commission  has  previously  defined  two  distinct
    retail gas supply markets: retail gas supply to (i) small customers (including households) and (ii) large customers with a  possible  further
    sub-segmentation of the latter into (a) industrial customers and (b) power plants.[72]

101) The Parties agree that  distinguishing  between  small  customers  (standard-load  profile  customers)  and  large  customers  (load-metered
    customers) can be justified. They submit, however, that no further distinction should be made within the large customers market.

102) In the market investigation, all upstream and downstream wholesale supply competitors, retail competitors and the majority of wholesale  gas
    supply customers did not make a distinction between large industrial customers and power plants.

103) The Commission has previously indicated that retail supply to large customers can be national or regional,  but  has  ultimately  left  this
    question open.[73]

104) The Parties submit that the market is national in scope, basing themselves on the same reasoning as with respect to wholesale  supply.  They
    evoked that the FCO, in its recent Gazprom/VNG decision, left the geographic scope of the German retail supply to large customers  open,  but
    considered a national, market area and grid-wide scope[74].

105) In the market investigation, the large majority of competitors and customers active on the upstream  and  downstream  wholesale  gas  supply
    markets as well as the competitors and customers active on the retail gas supply market considered the geographic scope  of  the  retail  gas
    supply market to at least encompass the entire German territory.

106) As there are no competition concerns under any conceivable market definition, the exact delineation of the relevant product  and  geographic
    market can, however, be left open.

2 Competitive Assessment

107) In the investigation, the Commission has assessed whether the proposed transaction would be likely to confer  on  Gazprom  the  ability  and
    incentive to engage in either input or customer foreclosure. Given that the transaction does not bring about any horizontal  overlaps  either
    at the upstream level (where Gazprom is active) or on the downstream level concerning the wholesale supply of German customers (where  Wingas
    is active), the transaction does not lead to changes in the structure of those markets in  horizontal  respect.  On  this  basis,  horizontal
    unilateral effects or horizontal coordinated effects were not the focus of the investigation, but the Commission's investigation  focused  on
    the relation between Gazprom's upstream activity and Wingas' downstream activity and therefore on vertical theories.

108) The German gas market is currently showing increases in hub liquidity which in turn enhances  the  reliability  of  gas  price  signals.  In
    particular, given that a successful input foreclosure by an upstream gas supplier could also have an impact on hub liquidity and on prices in
    Germany, the Commission's assessment mainly focused on whether the proposed  transaction  would  lead  to  Gazprom  having  the  ability  and
    incentives to engage in input foreclosure post-merger.

109) Despite some concerns expressed by certain demand-side respondents to the Commission's market investigation relating to a  possible  ability
    of Gazprom to, post-merger, engage in input foreclosure, the results  of  the  market  investigation  have  not  confirmed  that  such  input
    foreclosure would be likely to take place. The large majority  of  respondents  to  the  market  investigation  did  not  consider  that  the
    transaction will have an impact on the availability and/or the price of gas in Germany.[75]

110) The table below gives an overview over the 2011 shares of Gazprom and the most important competitors for  the  upstream  supply  of  gas  in
    Germany:

              Upstream wholesale supply in Germany (2011)

|Company                                     |Upstream wholesale supply (H-gas)[76]      |
|Gazprom                                     |[40-50]%                                   |
|Statoil                                     |[20-30]%                                   |
|GasTerra                                    |[0-5]%                                     |
|Shell                                       |[5-10]%                                    |
|ENI                                         |[5-10]%                                    |
|ExxonMobil                                  |[0-5]%                                     |
|Dong                                        |[5-10]%                                    |

                                                               Source: Gazprom[77]

111) Wingas' market share on the various potential relevant downstream wholesale and retail H-gas supply markets in Germany  is  modest,  ranging
    between [10-20]% and [20-30]% and would be even lower, if markets are considered to comprise L-gas as well. The below tables give an overview
    of the 2011 shares of Wingas' and its main competitors on the various downstream wholesale and retail gas supply markets in Germany:

                                                  Downstream wholesale supply in Germany (2011)

|Company                                                 |Supra regional wholesale supply to regional wholesalers   |
|                                                        |(H-gas)[78]                                               |
|Wingas                                                  |[10-20]%                                                  |
|E.ON                                                    |[30-40]%                                                  |
|VNG                                                     |[10-20]%                                                  |
|ExxonMobil                                              |[5-10]%                                                   |
|Shell                                                   |[5-10]%                                                   |
|RWE                                                     |[5-10]%                                                   |
|Erdgas Münster                                          |[0-5]%                                                    |

    |Company                                                 |Supra regional wholesale supply to distributors           |
|                                                        |(H-gas)[79]                                               |
|Wingas                                                  |[10-20]%                                                  |
|E.ON                                                    |[30-40]%                                                  |
|VNG                                                     |[10-20]%                                                  |
|ExxonMobil                                              |[10-20]%                                                  |
|Shell                                                   |[5-10]%                                                   |
|RWE                                                     |[5-10]%                                                   |
|Erdgas Münster                                          |[5-10]%                                                   |

                                                               Source: Gazprom[80]

                                                         Retail supply in Germany (2011)

|Company                                                 |Retail supply to load-metered Industry and Corporate      |
|                                                        |customers (H-gas)[81]                                     |
|Wingas                                                  |[10-20]%                                                  |
|RWE                                                     |[10-20]%                                                  |
|E.ON                                                    |[40-50]%                                                  |
|VNG                                                     |[10-20]%                                                  |
|ExxonMobil                                              |[0-5]%                                                    |
|Shell                                                   |[0-5]%                                                    |
|ErdgasMünster                                           |[0-5]%                                                    |

|Company                                                 |Retail supply to Power Plants (H-gas)[82]                 |
|Wingas                                                  |[10-20]%                                                  |
|RWE                                                     |[10-20]%                                                  |
|E.ON                                                    |[50-60]%                                                  |
|VNG                                                     |[5-10]%                                                   |
|ExxonMobil                                              |[0-5]%                                                    |
|Shell                                                   |[0-5]%                                                    |
|ErdgasMünster                                           |[0-5]%                                                    |

                                                               Source: Gazprom[83]

112) For anti-competitive input foreclosure to be a likely concern, at least two cumulative conditions need to be in  place.  First,  the  merged
    entity needs to have the ability to foreclose its competitors downstream (for example by increasing their input costs,  or  otherwise  worsen
    their access to the upstream input). Second, the merged entity needs to have sufficient incentives to foreclose its  downstream  competitors.
    Therefore, as part of the market investigation, these conditions were examined in detail.and it was found that they are not  present  in  the
    case at hand.

    A.      Ability to engage in input foreclosure

113) Gazprom's 2012 share of the German upstream H-gas supply market was [40-50]%, which corresponded to […] bcm of gas sold  to  Germany.  On  a
    broader market including both H- and L-gas, Gazprom's 2012 market share was just slightly above [30-40]%.[84]

114) Gazprom's ability to foreclose its downstream competitors in Germany would depend on (i) to what extent its  customers  can  rely  on  their
    LTCs with Gazprom, and (ii) whether and to what extent Gazprom's gas volumes sold in Germany can be replaced with additional gas volumes from
    its competitors in the event that it were to withhold part of its supplies from downstream rivals.

115) LTCs can in general protect customers from input foreclosure as they do not allow the upstream supplier  to  unilaterally  increase  prices.
    However, the market investigation has shown that most of the LTCs that Wingas'  downstream  competitors  currently  have  with  Gazprom  have
    generally resulted in prices that exceed the market price, i.e. the hub price, which thus cause losses to and impose an  additional  risk  on
    these competitors.[85] As a result, in principle and without changes in market conditions, some of these competitors would be interested in a
    reduction of the ToP volume obligations in these LTCs ([description of price revision mechanisms contained  in  Gazprom's  LTCs  with  German
    customers]). The pressure that its LTCs place on its German customers could thus offer Gazprom an opportunity  to  reduce  sales  to  Wingas'
    competitors and to try to attract (via Wingas) the ultimate  consumers  of  these  volumes  of  gas  (i.e.  the  industrial  and  residential
    customers).

116) However, during the market investigation it was confirmed  that  in  case  Gazprom  were  to  attempt  to,  post-merger,  foreclose  Wingas'
    downstream competitors by not supplying them, the H-gas volumes subject to such an attempted foreclosure could be replaced with additional H-
    gas volumes from Gazprom's competitors. It was also confirmed that issues such as (i) a potential  increased  gas  demand  in  Germany,  (ii)
    differences in monthly consumption patterns due to seasonality, and (iii) the amount of available firm transport capacity, do not change this
    conclusion.

117) In particular, the additional gas volumes from other upstream suppliers that could replace Gazprom volumes subject  to  an  attempted  input
    foreclosure include:

       i. redirected current gas exports out of Germany by downstream wholesalers of gas in Germany (for  example,  the  gas  which  used  to  be
          purchased by a wholesaler at the German hub and exported to France would remain in Germany),

      ii. redirected gas currently sold at hubs outside Germany (for example, a Norwegian producer would reduce deliveries at the Dutch  hub  and
          increase deliveries at the German hub).

     iii. current unused volumes in existing LTCs with Gazprom's upstream competitors,

      iv. moreover, a limited amount of redirected gas that normally transits through Germany (for example, the Norwegian gas that flows  through
          Germany to Italy would be sold in Germany and Italy would source more from Algeria or Libya).

118) Based on the availability of these additional volumes, it appears that Gazprom would not have the ability to engage in input foreclosure  to
    the detriment of Wingas' competitors in Germany.

    B. Incentive to engage in input foreclosure

119) Even assuming that Gazprom would have some ability to engage in input foreclosure, there appears to be no  incentive  to  do  for  at  least
    three reasons.

120) First, as Gazprom already (jointly) controls Wingas, it already owns a channel to  the  downstream  market.  This  existing  access  to  the
    ultimate buyers of the gas is not altered by the merger.

121) Second the potential medium to long-term gains (through raising downstream prices) would most likely not compensate  the  short-term  losses
    of foregoing the current upstream revenue derived under Gazprom's German LTCs.

122) It must also be noted that a LTC price above the hub price is necessary for Gazprom's downstream  customers  (see  paragraph  (115))  to  be
    willing to reduce their ToP commitments under the LTCs. Naturally, the greater the divergence between LTC prices and  hub  prices,  the  more
    likely the interest for the downstream customer to reduce its ToP commitments. This means that Gazprom's ability and incentive  to  foreclose
    are inversely correlated, as the conditions for Gazprom to have the ability to foreclose are those that would limit its incentive to  do  so.
    In other words, a higher LTC price increases the ability of Gazprom to foreclose (since  downstream  customers  would  willingly  reduce  ToP
    volumes) but conversely reduces the attractiveness of such a decision for Gazprom (since the higher the LTC price vis-à-vis  the  hub  price,
    the higher the loss for Gazprom of reducing the ToP volumes).

123) Furthermore, Gazprom/Wingas would also find it difficult following a hypothetical foreclosure strategy to significantly increase  downstream
    prices in order to render the strategy profitable.[86] Hub prices provide an effective cap on retail prices, given that industrial  customers
    and wholesalers can source gas from what are now relatively liquid hubs in Germany and in surrounding regions. Gazprom/Wingas would therefore
    need to increase hub prices in Germany in order to increase downstream profits. Given the increasing convergence of  prices  across  hubs  in
    North-West Europe, a significant increase in hub prices across a much wider region would  be  required  for  a  foreclosure  strategy  to  be
    successful.[87]

124) Finally, the market investigation also confirmed that there have been new entrants on the downstream supply markets in  Germany  within  the
    past five years and that these entrants are already exercising pressure on local  incumbents  and  contributing  to  a  general  increase  of
    competition and low margins in these segments. Based on the above, it appears that Gazprom would not have an incentive  to  engage  in  input
    foreclosure, to the detriment of Wingas' competitors in Germany.

    C. Existence of minority interests

125) The Commission notes that Gazprom and Wintershall have respective pre-existing minority interests in VNG of 10.52% and  15.79%.  Although  a
    certain commonality of interests may currently exist between Gazprom and Wintershall, as noted by the BKartA in a recent decision,[88] it  is
    important to note that the proposed transaction does not concern at all the shares held by Gazprom and Wintershall in VNG.

126) The proposed transaction seemingly involves a weakening of any commonality of interests. First of all, the  existing  link  between  Gazprom
    and Wintershall in the downstream wholesale and retail gas supply markets in Germany, through their respective shareholdings in  both  Wingas
    and VNG, is weakened by the proposed transaction, due to Wintershall's exit from Wingas. The fact  that  the  proposed  transaction  involves
    Wintershall acquiring a minority stake in certain upstream gas fields in Western Siberia is, at the same time, merely a  continuation  of  an
    existing relationship between these companies at the upstream gas exploration and production level.[89] Therefore, the  proposed  transaction
    would seem to lessen the commonality of interests between Gazprom's and Wintershall's with regard to their respective minority  interests  in
    VNG.

127) Gazprom's 10.52% minority stake in VNG cannot be understood to confer upon it control over VNG.  Firstly,  the  Parties  indicate  that  the
    10.52% stake only allows Gazprom to have two representatives and therefore a small minority of VNG's supervisory board, while  it  also  does
    not have a majority at the level of the shareholders' meeting. Second, even under the assumption (although the  present  transaction  lessens
    the commonality of interests between the two undertakings, see above) that Gazprom's and Wintershall's stakes should be taken together,  they
    would still only have a minority of representatives on the supervisory board and would merely hold around 26% of the  capital  together.  The
    other shareholders in VNG are not widely dispersed, but include the German energy company EWE with a stake of  around  48%  and  East  German
    municipalities with a stake of slightly more than 25%. On this basis, even the combined stakes of Gazprom and Wintershall  would  not  confer
    control.

128)  In any event, as indicated before, the distribution of shares within VNG is untouched by the present transaction. Gazprom's existing  stake
    in VNG does not make it more likely that Gazprom – via the increased stake in Wingas -  would  engage  in  input  foreclosure  vis-à-vis  the
    downstream wholesalers in the German market. If anything, Gazprom would have an incentive to protect the value of its minority stake  in  VNG
    and therefore it would seem unlikely to foreclose the necessary gas supply for VNG.

129) Therefore, Gazprom's minority stake in VNG is unlikely to change the analysis on input foreclosure set out before.

    D. Ability and incentive to engage in customer foreclosure

130) Finally, the proposed transaction does not raise concerns of customer foreclosure with respect to the German gas supply markets.

131) Firstly, it must be noted that Wingas currently acquires only a limited amount of gas from  upstream  wholesale  gas  suppliers  other  than
    Gazprom. Indeed, it has supply contracts in place with third party suppliers for a total Annual Contract Quantity (i.e. the maximum amount of
    gas that a customer can demand under the relevant supply agreement) of  […]  bcm.[90]  Therefore,  the  supply  from  third  party  suppliers
    constitutes less than 5% of the German consumption. At the same time, Wingas in 2012 received […] bcm from Gazprom  [details  on  the  Annual
    Contract Quantities contained in Wingas' contracts with Gazprom]. Moreover, Wingas' third-party supplies are covered by a number of different
    supply contracts […]. This also shows that Wingas is not a key customer for third party suppliers.

132) Secondly, it has to be noted that many of Gazprom's competing upstream gas suppliers are  themselves  vertically  integrated,  meaning  that
    they are simultaneously active at the upstream wholesale gas supply as well as the downstream wholesale and/or retail gas supply  markets  in
    Germany. In the market investigation, the majority of respondents at the upstream wholesale supply level submitted that they  are  active  on
    the downstream wholesale gas supply markets in Germany. In addition, half of the respondents explained  that  they  have  gone  even  further
    downstream and are active on the market for retail supply of gas to large customers in Germany.

    E.      Conclusion on input and customer foreclosure

133) Given the above, it does not seem likely that the proposed transaction, which would consist in the change from  joint  to  sole  control  by
    Gazprom over Wingas, would likely lead to input or customer foreclosure on the German wholesale gas supply market.

       CONCLUSION

134) For the above reasons, the European Commission has decided not to oppose the notified operation  and  to  declare  it  compatible  with  the
    internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

For the Commission

(Signed)
Joaquín ALMUNIA
Vice-President
-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.
[2]   Publication in the Official Journal of the European Union No C 321, 07.11.2013, p. 7.
[3]   All transactions form part of the same swap agreement that underpins the proposed transaction and which was signed between the  Parties  on
14 November 2012 (the "Basic Swap Agreement"). Accordingly, all the acquisitions of control are linked by  mutual  conditionality,  or  de  jure.
Indeed, pursuant to Section 2.1 and Recital B of the Basic Swap Agreement, the transfer to Gazprom of the “Wintershall  Assets”  [description  of
certain provisions in the Basic Swap Agreement], and the transfer to Wintershall of the “Gazprom Asset” [description  of  certain  provisions  in
the Basic Swap Agreement] will all be “conditional on, and in consideration of, the other.”
[4]   The sales are intended to be made for the duration of Gazprom's exploitation license, therefore until at least [...].
[5]   Basic Swap Agreement, sections 4.1.2-4.1.5.
[6]   Cf. Commission's Jurisdictional Notice, recitals 91 and 98.
[7]   Basic Swap Agreement, section 5.6.1(b).
[8]   Form CO, footnote 23 to paragraph 3.1. The Parties e.g. indicate that, although 'mechanisms for resolution of a deadlock' are  foreseen  to
be incorporated into the shareholders agreements of WINZ and Wintershall Services respectively, they do not intend  for  any  such  mechanism  to
confer on either Wintershall or Gazprom any casting vote that would confer sole control within the meaning of the Merger Regulation.
[9]   Basic Swap Agreement, Section 2.1 and Recital B.
[10]  For completeness sake, the Commission notes that [details on  Wingas'  and  W&G's  corporate  structures  and  decision-making  processes].
However, the statutes of W&G and Wingas GmbH provide for a mechanism conferring [details on W&G's and Wingas' decision-making processes].
[11]  Paragraph 8 of the Statutes (Satzung) of Wingas provides that its advisory board is composed of ten members, with each  party  entitled  to
appoint five members. Paragraph 10 of the Statutes and paragraph 3(2) of the  Rules  of  Procedure  (Geschäftsordnung  für  den  Beirat)  of  the
advisory board provide that decisions are taken [details on Wingas' decision-making process].
[12]  In 2012, WINZ produced […] billion cubic metres of gas and [details on WINZ's production  quantities],  achieving  net  sales  of  EUR  […]
million, cf. Financial Statements & Annual Report 2012 of Wintershall Nederland B.V.
[13]  Cf. Commission's Jurisdictional Notice, recitals 24 and 91.
[14]  Turnover calculated in accordance with Article 5 of the Merger Regulation.
[15]  Conventional natural gas and shale gas have the same product properties and are used for identical purposes.

[16]  COMP/M.5549 EDF/Segebel, of 12 November 2009, para 167-168; COMP/M.3696 E.ON/MOL, of 21 December 2005, para 99;  COMP/M.3410  Total/Gas  de
France, of 8 October 2004.
[17]  COMP/M.3410 Total/Gaz de France, of 8 October 2004, para 18; COMP/M.3086 Gaz de France / Preussag Energie, of 25 April 2003, para. 14-15.
[18]  COMP/M.5467 RWE Essent, of 23 June 2009; COMP/M.3410 Total / Gaz de France, of 8 October 2004.
[19]  See Section 5.3.5.1for a full definition of H-gas and L-gas.
[20]  Mainly because both pore and cavern storage serve the same purpose, are offered by the same suppliers and can  accommodate  H-  and  L-gas,
therefore being in the same price range.
[21]  COMP/M.3696 E.ON/MOL, of 21 December 2005, para 130.
[22]  COMP/M.3086 Gaz de Frace/Preussag Energie, of 25 April 2003, para 16; IV/M.1383 Exxon/Mobil, of 29 September 1999, para. 262-263.
[23]  This conclusion was also recently reached by the FCO (BKartA B8-116/11 Gazprom/VNG, of 31 January 2012).
[24]  Such facilities are physically located in Austria, but are connected to the German grid. To account for this, the  full  capacity  of  both
facilities was attributed to the German as well as the Austrian market.
[25]  In a market limited to the storage of H-gas in pore and/or cavern facilities in a 200 km radius around the Rehden facility in Germany,  the
Parties indicate that their activities would not overlap. Also, the Parties submissions show that in a market limited to  the  storage  of  H-gas
within a 200 kilometer radius (including storage facilities in  Thann,  Puchkirchen,  Aigelsbrunn,  7fields,  Haidach,  Bierwang,  Inzenham-West,
Schmidhausen, Wolfersberg and Breitbrunn-Eggstätt) around their Haidach facility (located in Austria but also serving German demand), their post-
merger market share would amount to [30-40]%.
[26]  In Austria, only pore storage facilities exist, as explained by the Austrian regulator  (http://www.e-control.at/en/market_players/natural-
gas/natural-gas-market/storage). Accordingly, the potential distinction between pore and cavern  storage  facilities  is  not  relevant  for  the
Commission's assessment in this regard. Also, given that the Parties' only storage  facility  is  the  Haidach  facility,  no  further  potential
regional gas storage markets in Austria have to be assessed.
[27]  The Parties indeed claim that their combined market share would not exceed ~[0-5]% based on existing merchant supply and  freely  available
capacity in Germany, which it expects to be similarly low in Austria.
[28]  A limited summer-winter gas price spread at the gas trading hubs limits the premium paid for gas storage, given that the costs  of  storage
can likely not be covered by the difference in the price of gas in winter and summer.
[29]  COMP/M.6801 Rosneft/TNK-BP, of 8 March 2013; COMP/M.5585 Centrica/Venture Production, of 21 August 2009; COMP/M.3294 ExxonMobil/BEB, of  20
November 2003; COMP/M.2681 Conoco/Philipps Petroleum, of 6 March 2002; COMP/M.1532 BP Amoco/Arco, of 29 September 1999.
[30]  COMP/M.3294 ExxonMobil/BEB, of 20 November 2003; COMP/M.2681 Conoco/Philipps Petroleum, of 6 March 2002; COMP/M.1532 BP Amoco/Arco,  of  29
September 1999.
[31]  Through its joint ownership of W&G Beteiligungs-GmbH & Co. KG.
[32]  Overall gas storage capacity in Austria stood at 7.5 bcm at the end of 2011; http://www.e-control.at/en/market_players/natural-gas/natural-
gas-market/storage [website accessed on 20 November 2013].
[33]  Based on a market total of 24 319 mcm provided by the Parties.
[34]  Indeed, several respondents to the market investigation indicated that the spread between the gas price in summer  and  the  gas  price  in
winter is currently limited. This limited summer-winter spread determines how much downstream operators are willing to pay for  gas  storage  and
is thus a proxy for the perceived importance of having gas storage facilities at one's disposal for conducting gas supply operations.
[35]  Cf. Commission's non-horizontal guidelines, OJ-C 265/6, recitals 60 and 61.
[36]  The Parties indicate that Gazprom's Austrian third-party gas storage bookings amounted to […] mcm, while Wingas'  total  unbooked  capacity
in Austria would only amount to […] mcm.
[37]  COMP/M.4238 E.On/Prazská Plynárenská, of 11 July 2006, para 16.
[38]  The Parties submit that a 2005 sector inquiry by the Austrian Federal Competition Authority found that the  Austrian  wholesale  market  is
not divided into first level and second-level wholesalers. All resellers procure their natural gas volumes  directly  from  wholesale  suppliers,
without an additional intermediary trade level. As to the Czech Republic, the Parties submit that all wholesalers compete for the same  group  of
customers without an additional intermediary trade level.
[39]  COMP/M.5467 RWE/Essent, of 23 June 2009; COMP/M.5220 ENI/DISTRIGAZ, of 15 October 2008; COMP/M. 5802 RWE Energy/Mitgas, of 17 June 2010.
[40]  COMP/M.4238 . E.On/Prazská Plynárenská, of 11 July 2006, p.16.
[41]  COMP/M.4180 Gaz de France/Suez, of 14 November  2006;  COMP/M.  3868  Dong/Elsam/Energi,  of  14  March  2006;  COMP/M.  3440  EDP/ENI/GDP;
COMP/M.5740 Gazprom/A2A/JV, of 16 June 2010.
[42]  The reasons for selecting customers whose annual demand exceeds 500 000 cm are that, according to the findings of the  Austrian  regulator,
gas supply to those customers is characterised by a wider range of products than for those below this consumption threshold  and  therefore  they
benefit from a more diversified supply structure in comparison with smaller customers.
[43]  COMP/M.6068 ENI/ACEGASAPS/JV, of 11 April 2011; COMP/M.5740 Gazprom/A2A/JV, of 16 June 2010;  COMP/M.5496  Vattenfall/Nuon  Energy,  of  22
June  2009;  COMP/M.4672  E.on/Endesa  Europa/Viesgo,  of  6  August  2007;  COMP/M.   4110   EON/Endesa,   of   25   April   2006;   COMP/M.3230
Statoil/BP/Sonatrach/In Salah JV, of 19 December 2003; COMP/M.3007 E.on/TXU Europe Group, of 18 December 2002.
[44]  COMP/M.5467 RWE/Essent, of 23 June 2009; COMP/M.4890 Arcelor/Ferngas, of 22 November 2007.
[45]  COMP/M.6068 ENI/ACEGASAPS/ JV, of 11 April 2011; COMP/M.4180 Gaz de France/Suez, of 14 November 2006.
[46]  The Parties indicate that Gazprom currently exercises joint control over Vemex, through its 50.14% shareholding.  The  Parties  furthermore
indicate that the reason Gazprom does not solely control Vemex is due to [details  on  Vemex's  decision-making  process].  Indeed,  the  Parties
indicate that 33% of Vemex' shares are held by Centrex which the Parties indicate  is  in  turn  controlled  by  Gazprombank.  Gazprombank  would
ultimately not be controlled by any other natural or legal person.
[47]  The other downstream market, where Wingas is active in Austria, namely the retail supply to load-metered customers  in  excess  of  500,000
cm/year, shows a negligible market share significantly below [0-5]% for Wingas.
[48]  Figures for 2011; See Czech Republic National Reports on Electricity and Gas Industries 2009 and 2010; OTE 2011 Yearly  Report  on  Natural
Gas Supply and Consumption in the Czech Gas System, Czech Energy Regulatory Office
[49]  The Commission notes that more recent data (See: National Report of the Energy Regulatory Office of the Electricity and Gas  industries  in
the Czech Republic for 2012) indicate a decrease of RWE's market share and a (small) increase of VEMEX' market share.

[50]  COMP/M.4180 Gaz de France/Suez, of 14 November 2006; COMP/M.5467 RWE/Essent, of 23 June 2009; COMP/M. 5802 RWE Energy/Mitgas,  of  17  June
2010; COMP/39.317 – E.ON Gas, of 4 May 2010; COMP/39.316 – Gaz de France, of 3 December 2009.
[51]  COMP/M.4180 Gaz de France/Suez, of 14 November 2006.
[52]  Germany, the Netherlands, France and Belgium
[53]  BKartA B8-116/11 Gazprom/VNG, of 31 January 2012.
[54]  http://www.net-connect-germany.de/cps/rde/xchg/SID-00228200-37B94BF6/ncg/hs.xsl/2557.htm?rdeLocaleAttr=en
[55]  http://www.gaspool.de/konvertierungsentgelt.html?L=1
[56]  None of the respondents on the demand side of the downstream wholesale gas supply have actually switched their sourcing from  H-gas  to  L-
gas or vice-versa during the past 5 years.
[57]  This was mentioned by the majority of the Parties' German upstream competitors, German downstream wholesale as well as  retail  competitors
and customers, and the German TSOs.
[58]  […].
[59]  This is determined by the overall conversion capacity of the existing conversion plants as well  as  by  the  available  H-gas  volumes  to
replace the declining L-gas production in Germany.
[60]  The total virtual conversion of H-gas into L-gas in GASPOOL in 2012 and 2013 amounted to 297 GWh, or […]% of total gas transported  in  the
GASPOOL market area. As regards the virtual conversion of L-gas into H-gas, this amounted to 24 GWh or 0.000015% of total gas transported in  the
GASPOOL market area. The same activities in NCG amounted to 1 790 GWh of virtual H-gas into L-gas conversion and 11  094  GWh  of  virtual  L-gas
into H-gas conversion during 2011-2013.
[61]  COMP/M.6801 Rosneft/TNK-BP, of 8 March 2013; COMP/M.5585 Centrica/Venture Production, of 21 August 2009; COMP/M.4545  Statoil/Hydro,  of  3
May 2007.
[62]  COMP/M.6477 BP/Chevron/ENI/Sonangol/Total/JV, of 16 May 2012; COMP/M.5585 Centrica/Venture  Production,  of  21  August  2009;  COMP/M.5220
ENI/DISTRIGAZ, of 15 October 2008; COMP/M.4545 STATOIL/HYDRO, of 3 May 2007.
[63]  COMP/M.6477 BP/Chevron/ENI/Sonangol/Total/JV, of 16 May 2012; COMP/M.4545 STATOIL/HYDRO, of 3 May 2007.
[64]  BKartA B8-116/11 Gazprom/VNG, of 31 January 2012.
[65]  COMP/M.4545 Statoil/Hydro, of 12 June 2007, paragraphs 13-16 (in which technical  constraints  such  as  absence  of  pipelines  or  import
capacity are mentioned); COMP/M.6801 Rosneft/TNK-BP, of 13 April 2013, paragraph 12;  COMP.39.315  ENI,  of  29  September  2010,  paragraph  28;
COMP/M.3696 E.ON/ Mol, of 16 September 2006, paragraph 131 (in which the various gas supply markets are defined national in  scope);  COMP/M.3440
ENI/EDP/GDP, of 19 November 2005, paragraphs 25-28 (for each of the gas supply markets identified in that decision, Portugal was  considered  the
relevant geographic market); COMP/M.1383 Exxon/Mobil of 29 September 1999, paragraph 134-152 (regional for Germany);  COMP.39315  ENI,  paragraph
28, with reference to e.g.: COMP/IV/M.713 RWE/Thyssengas, of 25 November 1996, paragraphs 15-19 and  COMP/M.2822  EnBW/ENI/GVS,  of  17  December
2002.
[66]  This convergence is supported by the Parties econometric analysis of the correlation between the prices of gas at  the  NCG,  GASPOOL,  TTF
and Zeebrugge hubs. The Parties looked at the correlation of day-ahead and month-ahead prices  through  the  2010-2013  period.  The  correlation
coefficient of both the day-ahead and the month-ahead prices exceeded 0.9 and the high correlation values were  not  found  to  be  driven  by  a
common trend (i.e. the case of "spurious correlation" can be excluded). A correlation coefficient is  a  measure  of  the  degree  to  which  two
variables are linearly related. It takes values between -1 and 1, with positive  values  indicating  a  positive  relationship  between  the  two
variables, and vice-versa. A correlation coefficient with a value close to 1 (e.g. 0.9 and above) indicates a very strong  positive  relationship
between the two variables.
[67]  COMP/M. 5802 RWE Energy/Mitgas, of 17 June 2010; COMP/M.5604 DONG/KOM-STROM, of 15 September  2009;  COMP/M.5467  RWE/Essent,  of  23  June
2009.
[68]  COMP/M.5467 RWE/Essent, of 23 June 23 2006; COMP/M.5220 ENI/Distrigaz, of 15 October 2008.
[69]  COMP/M. 5802 RWE Energy/Mitgas, of 17 June 2010.
[70]  Various measures have been implemented to achieve open and  non-discriminatory  third-party  access  to  gas  transportation  networks  and
obliged German TSOs to reduce market areas from 28 to currently 2.
[71]  BKartA B8-116/11 Gazprom/VNG, of 31 January 2012.
[72]  COMP/M.4180 Gaz de France/Suez, of 14 November  2006;  COMP/M.  3868  Dong/Elsam/Energi,  of  14  March  2006;  COMP/M.  3440  EDP/ENI/GDP;
COMP/M.5740 Gazprom/A2A/JV, of 16 June 2010.
[73]  COMP/M.6068 ENI/ACEGASAPS/JV, of 11 April 2011; COMP/M.5740 Gazprom/A2A/JV, of 16 June 2010;  COMP/M.5496  Vattenfall/Nuon  Energy,  of  22
June  2009;  COMP/M.4672  E.on/Endesa  Europa/Viesgo,  of  6  August  2007;  COMP/M.   4110   EON/Endesa,   of   25   April   2006;   COMP/M.3230
Statoil/BP/Sonatrach/In Salah JV, of 19 December 2003; COMP/M.3007 E.on/TXU Europe Group, of 18 December  2002;  COMP/M.5467  RWE/Essent,  of  23
June 2009; COMP/M.4890 Arcelor/Ferngas, of 22 November 2007.
[74]  BKartA B8-116/11 Gazprom/VNG, of 31 January 2012.
[75]  Responses to Questionnaires Q3 Upstream wholesale gas supply Germany competitors of 30 October 2013, question  71;  Q4  Upstream  wholesale
gas supply customers, downstream wholesale gas supply competitors, retail gas supply competitors (Germany) of 30 October 2013, questions  75  and
76; Q5 Downstream wholesale gas supply Germany customers of 30 October 2013, questions 52 and 53, and; Q6 Retail gas supply Germany customers  of
30 October 2013, questions 35 and 36.

[76]  If upstream wholesale supply were to comprise H- and L-gas, shares in Germany  for  2011  would  amount  to  [30-40]%  (Gazprom),  [10-20]%
(Statoil), [10-20]% (GasTerra), [5-10]% (Shell), [5-10]% (ENI), [5-10]% (ExxonMobil) and [0-5]% (Dong) (cf. Form CO, p.122).
[77]  Annex 7.3.2 to the Form CO.
[78]  If H- and L-gas are taken together, 2011 market shares in the supra-regional wholesale supply to regional wholesalers are as follows:  E.ON
[30-40]%, VNG [10-20]%, Wingas [10-20]%, ExxonMobil [5-10]%, Shell [5-10]%, RWE [0-5]%.
[79]  If H- and L-gas are taken together, 2011 market shares in the supra-regional wholesale supply to distributors are  as  follows:  E.ON  [30-
40]%, VNG [10-20]%, ExxonMobil [10-20]%, Wingas [5-10]%, Shell [5-10]%, RWE [5-10]%.
[80]  Form CO, pages 128 and 130 and Annex 7.3.3.
[81]  If H- and L-gas are taken together, 2011 market shares in retail supply to load metered industry and corporate customers  are  as  follows:
E.ON [40-50]%, VNG [10-20]%, ExxonMobil [0-5]%, Wingas [10-20]%, RWE [10-20]%, Shell [0-5]%.
[82]  If H- and L-gas are taken together, 2011 market shares in retail supply to power  plants  are  as  follows:  E.ON  [50-60]%,  VNG  [5-10]%,
ExxonMobil [0-5]%, Wingas [10-20]%, RWE [10-20]%, Shell [0-5]%.
[83]  Form CO, page 134 and Annex 7.3.5.
[84]  [description of Gazprom's share of the upstream H- and L-gas supply market in 2012].
[85]  This finding does not apply to [details of certain LTCs between Gazprom and German customers].

[86]  Downstream margins are already low in the market. Data provided by Wingas suggests that margins in Germany are currently in  the  order  of
[…]% of the hub price, [development of Wingas' margins in relation to hub prices since 2010].
[87]  Cf. footnote 73.
[88]  BKartA B8-116/11 Gazprom/VNG, of 31 January 2012; and: § 103 Abs. 1 AktG.
[89]  "Together with Gazprom, the company operates two projects in Siberia, Achimgaz and Yuzhno Russkoye. In 2007, the  Russian  Yuzhno  Russkoye
gas field was officially commissioned, marking the first time a German company was able to  produce  gas  directly  from  Western  Siberia.  With
recoverable natural gas reserves of more than 600 billion cubic meters, the Yuzhno Russkoye field is around three times the size of the  Achimgaz
joint venture established in 2003. In addition, in the Volgograd region, Wintershall has been producing  oil  together  with  Lukoil  for  twenty
years." Cf. http://www.wintershall.com/en/worldwide/russia.html.
[90]  Out of this quantity, approximately […] bcm is actually encompassed by gas swap agreements with delivery at the UK gas trading hub (NBP).

-----------------------
 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE