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    Wintershall writes down Nord Stream 2 loan

Summary

The $1.1bn financing package from Wintershall to Nord Stream 2 has been written off.

by: Callum Cyrus

Posted in:

Complimentary, NGW News Alert, Natural Gas & LNG News, Europe, Europe

Wintershall writes down Nord Stream 2 loan

Wintershall said March 2 it had written off its loans for the Nord Stream 2 pipeline, following moves by Shell and OMV to also distance themselves from the project.

The Germany production company will no longer pursue around €1bn ($1.1bn) of financing that had been earmarked for the $11bn Gazprom-operated pipeline, which cost $11bn and was completed last year.

The news is the latest twist in the Nord Stream 2 saga amid reports the operating company for the long-delayed project will seek to be declared insolvent. Gazprom is the only owner of Nord Stream 2 AG, but Engie, OMV, Shell, Uniper and Wintershall had all provided loans. Shell has said it will leave the project and OMV says it is reconsidering its involvement.

Wintershall is for now retaining its stakes in the Yuzhno Russkoye and Achimov gas projects in Siberia, even after OMV announced on March 1 it was cancelling a deal to buy into the latter. It says the projects "produce natural gas for European energy supply.

The company also remains a stakeholder in the 3,200-km gas pipeline grid Gascade, which sources produce from Russia as well as the North Sea. Gascade is described as critical gas transport infrastructure, connecting Germany along with four other European countries.

Wintershall, a subsidiary of German industry group BASF and the LetterOne investment firm owned by Russian billionaire Mikhail Fridman, will also no longer seek new oil and gas investments in Russia, and has committed to "basically stop all payments to Russia" with immediate effect. The company's annual press conference, due to be held on March 1, was cancelled due to the situation in Ukraine.

The announcement comes after Wintershall Dea chief executive Mario Mehren personally condemned Moscow's bloody invasion of Ukraine in a statement expressing "concern and dismay" at escalating hostilities.

"Wintershall Dea has been working in Russia for more than 30 years," Mehren wrote on March 1, "Many of our colleagues work for our company and our joint ventures with partners from Russia on a daily basis."

"Many of our colleagues come from Russia or Ukraine. For them in particular, but also for all of us, this escalation on the orders of the Russian government is a hard blow."