Fortum has a stake of around 76 percent in the Düsseldorf gas company Uniper, which in turn has invested in the Nord Stream 2 pipeline together with four other European groups and the Russian gas giant Gazprom.
(Photo: Reuters)
Dusseldorf The Finnish energy company Fortum is sticking to the Nord Stream 2 project. One was “shocked and saddened by Russia’s attack on Ukraine,” according to a statement by CEO Markus Rauramo on the occasion of the presentation of the annual business figures on Thursday. It shook the relationship between Russia and Europe.
However, the company wants to continue to hold on to the power generation business in Russia and the controversial financial participation of the Fortum subsidiary Uniper in the pipeline project. Overall, Fortum’s business in Russia has a book value of around 5.5 billion euros. For fiscal 2021, Fortum reported an increase in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) from 2.4 billion euros to 3.8 billion euros compared to the previous year. The operating loss shrank to minus 588 million euros after 1.6 billion euros in the previous year.
The Finns hold around 76 percent of Uniper. The Düsseldorf gas company, in turn, has invested in the pipeline project together with four other European groups and the Russian gas giant Gazprom. The Wintershall Dea concern, as well as the British Shell concern, have already written off the gas connection due to the Russian attack on Ukraine.
The Austrian group OMV is still examining its participation. Investor Engie announced on Thursday that it was valuing its outstanding credit risk related to Nord Stream 2 at up to $1.1 billion.
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Uniper does not appear to be planning such a step immediately at the moment. Fortum boss Rauramo and CFO Bernhard Günther said when asked that Fortum’s handling of the previous Nord Stream 2 financing was an issue for the business figures for the first quarter, but no statements were currently planned. The Uniper share lost around seven percent on Thursday alone by noon. Within a month she has lost more than 40 percent.
New investment projects in Russia stopped
It currently seems extremely unlikely that funds from Nord Stream 2 will flow back to the financial investors. In the course of the Ukraine war, the federal government recently put the certification of the finished pipeline on hold, and the USA had also imposed sanctions on the project. On Tuesday, the responsible Swiss authority announced that Nord Stream 2 had massive payment difficulties due to the sanctions imposed and was insolvent. The pipeline operator denies this, but has laid off all employees.
While Fortum did not comment on the abandonment of Uniper’s financial investments in Nord Stream 2, the Finns announced that they had stopped all new investment projects in Russia until further notice. They also want to further reduce the business with thermal energy generation there.
Operations in the existing facilities are currently continuing as normal. However, Fortum also stated: “The situation is very dynamic and evolving on a daily – if not hourly – basis and it is very difficult to predict the extent to which it will impact our future business.”
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The Finnish group also wrote: “Despite all the uncertainty, one thing is absolutely clear: Europe urgently needs an ambitious energy transition.” Investments support clean electricity, clean gas and flexibility. However, the company’s definition of clean electricity and gas is not without controversy.
Fortum, for example, announced that it would apply for longer operating times for a nuclear power plant in Loviisa, Finland, and that it would be involved in the planning of an LNG terminal via Uniper. In the future, this could also be used to import hydrogen.
Environmental organizations such as Urgewald do not see any contribution to clean energy in such activities, especially since the boss of the Fortum subsidiary Uniper, Klaus-Dieter Maubach, has repeatedly spoken out in favor of a longer use of so-called blue hydrogen. It is made from fossil natural gas.
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