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    Uniper’s Russian Pipe Role: 'Safe If Fortum Succeeds'


Fortum has sought to reassure Uniper management regarding strategic cooperation with the Gazprom-led Nord Stream 2 pipeline project.

by: Mark Smedley

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Uniper’s Russian Pipe Role: 'Safe If Fortum Succeeds'

Fortum has sought to reassure Uniper management that, were the Finnish firm's takeover offer to succeed, the German firm’s strategic role in the Gazprom-led Nord Stream 2 pipeline (NS2) project would be safe.

The remarks by Fortum to NGW follow its disclosure September 20 of an expected bid for E.ON’s 46.55% stake in Uniper, and later on the remaining shares too in the firm, valuing 100% of Uniper at €8.05bn.

“We know that the Nord Stream project is very important for Uniper,” a spokesperson for Fortum told NGW September 20: “As an investor, we would fully support the project, if we get there” - meaning if Fortum's offer for E.On's Uniper stake were successful.

Asked if Fortum would commit to retain Uniper’s role as one of the five western financiers to Gazprom on the NS2 venture, the Fortum spokesperson said: “I don’t want to go into the specifics of the project. But of course, if we were a major investor in Uniper, we would fully support the management and what they would like to do with the project.”

Shell, French utility Engie, Austria’s OMV, and Germany's Uniper and Wintershall signed financing agreements this April with Nord Stream 2 AG, the Gazprom-led company developing the pipeline project, whereby each of the five is lending close to a €1bn each to the €9.5bn NS2 project.

Fortum CEO: Uniper "An Excellent Match"

Fortum CEO Pekka Lundmark said earlier September 20: “We intend to be a long-term investor in Uniper and we take our responsibility to all stakeholders very seriously,” adding: "Uniper's stated role as the provider of security of supply would be an excellent match with Fortum's ambition to accelerate the energy transition with increasing renewable generation and innovative solutions.”

Fortum is 50.76% controlled by the Finnish state, through the Prime Minister's office there. Most remaining stakes are held by private and some public pension funds, banks and trusts. Neutral Finland has historically cooperated with Russia, and most of its gas (by Finnish state-owned utility Gasum) continues to be supplied by Russian giant Gazprom, despite the country's modest diversification by sourcing LNG.

Fortum’s statement continued: “The businesses and competencies of Fortum and Uniper are highly complementary. Uniper's production portfolio in Sweden is mainly based on CO2-free hydro and nuclear power, and is therefore an excellent fit with Fortum, one of the cleanest power producers in Europe. In Russia, Uniper's [electricity] production fleet, like that of Fortum's, is largely based on highly efficient gas-fired generation. In continental Europe, Uniper has a technologically advanced, flexible and highly cost-efficient generation portfolio predominantly based on gas, coal and hydropower.”

“Uniper's power plants and gas assets have an essential role in providing security of supply and affordable energy as Europe transitions towards low emission energy,” added Fortum’s statement, adding that Uniper’s commodities trading is “complementary to the power generation business” and “includes sizeable gas storage and long term contract portfolios that play a key role in ensuring security of supply.”


Mark Smedley