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Germany’s Uniper assessing Nord Stream 2 impairment over suspension


© Reuters. FILE PHOTO: The logo of German energy utility company Uniper SE is pictured in the company’s headquarters in Duesseldorf, Germany, March 10, 2020. REUTERS/Thilo Schmuelgen

By Christoph Steitz and Tom Käckenhoff

FRANKFURT (Reuters) – German utility Uniper said on Wednesday it is assessing whether the suspension of Gazprom (MCX:GAZP)’s Nord Stream 2 will result in impairments on its 1 billion euro ($1.1 billion) exposure to the gas pipeline.

Uniper, majority-owned by Finland’s Fortum, said the Ukraine crisis escalation meant that Nord Stream 2 “could delay further or be affected otherwise”, adding that it was constantly monitoring the situation.

Berlin on Tuesday halted Nord Stream 2, which would double Russian gas flows to Germany, after Moscow formally recognised two breakaway regions in eastern Ukraine.

Uniper is one of five companies that have each pumped 950 million euros into the pipeline and has in the past warned it may have to impair the loan provided to Nord Stream 2 if the project cannot be completed.

“We are evaluating the impact of yesterday’s decision on our claims towards Nord Stream 2 including potential impairment implications,” Uniper CEO Klaus-Dieter Maubach told reporters after presenting full-year results.

Chancellor Olaf Scholz pulled the plug on the 9.5 billion euro pipeline, saying that in light of recent events Germany’s Economy Ministry had to make a new assessment on whether it was putting energy supply at risk.

That means that a key requirement in the certification process is lacking, effectively translating into an indefinite hiatus of the pipeline, which would bypass Ukraine.

Shares in Uniper, which is one of the biggest foreign investors in Russia’s energy sector and owns a majority in local utility Unipro, fell as much as 6.9% on the news to their lowest level since Sept. 3.

Austria’s OMV said on Tuesday it currently saw no need for write-downs over its involvement in Nord Stream 2.

Maubach said that Uniper was not currently looking at any legal steps in relation to the suspension, hoping that the pipeline will eventually be certified on the back of a diplomatic solution to the Ukraine crisis.

The other co-investors in the pipeline are Shell (LON:RDSa), France’s Engie and Germany’s Wintershall Dea, which is due to hold its annual press briefing on Thursday.

($1 = 0.8810 euros)

Germany’s Uniper assessing Nord Stream 2 impairment over suspension

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