Uniper writes off Nord Stream 2 loan worth $1.07 billion

Uniper has decided to write off its US $1.07 billion loan to Nord Stream 2 and will begin a divestment process for its Russian subsidiary Unipro when possible, the German utility said on Monday, the latest energy company to respond to Moscow’s invasion of Ukraine.

Germany has halted the Nord Stream 2 Baltic Sea pipeline project, which would have doubled Russian gas flows to Germany, following Russia’s attack on Ukraine.

Uniper condemned the Russian invasion of Ukraine in the strongest possible terms, because Russia was breaking international law and the principles of the UN Charter, Uniper CEO Klaus-Dieter Maubach said in a statement. “I feel deep sympathy for all people who are directly or indirectly affected by a war in Ukraine for which there is no justification whatsoever. Especially in light of our long-standing business relations with Russia, we are both shocked and moved by these unprecedented developments,” he said.

Uniper, in which Finland's Fortum owns a 78 percent stake, said it would fully impair its 987 million euro ($1.07 billion) loan to Nord Stream 2. Pipeline co-funders Wintershall Dea, Shell and OMV have already taken similar steps in recent weeks.

Uniper, which is one of the top importers of Russian gas, said existing long-term import contracts with Russia will remain part of secure European gas supply, but it will not enter into new long-term supply contracts for natural gas with Russia.

As part of alternative gas supplies, the company will restart the LNG terminal project in Wilhelmshaven and increase diversification of supply sources, while taking proactive measures to strengthen security of supply and improve fuel supply diversification for power generation.

Uniper also said the divestment process for its Russian subsidiary – where it is the majority owner with 83.73 percent stake – will resume when possible. “At the end of last year, Uniper started a divestment process of Unipro. Due to the current situation, this process has been halted for the time being and will be restarted as soon as it is feasible,” it said.

Unipro operates five power plants with a total capacity of over 11 gigawatts in Russia with its approximately 4,300 employees. “It is currently impossible to predict how potential Russian sanctions could affect Unipro’s business and financial situation. Unipro’s most important goal at the moment is the secure operation of its plants and the fulfilment of its delivery obligations to its customers,” the company said.