An employee walked among above-ground parts of a natural gas storage facility of Uniper Energy Storage in Bierwang, Germany, on 10 June 2022. Uniper’s natural gas operations have incurred daily losses of up to 50 million euros due to lack of gas deliveries from Russia, according to Helsingin Sanomat. (Lennart Preiss – AFP/Lehtikuva)

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MINISTER for European Affairs and Ownership Steering Tytti Tuppurainen (SDP) does not warm up to the idea of Fortum, a Finnish majority state-owned energy company, committing further capital to supporting its ailing German subsidiary, Uniper.

German Minister for Economic Affairs and Climate Action Robert Habeck stated on Saturday that Fortum should take part in bailing out Uniper.

Tuppurainen argued to STT on Sunday that Fortum has demonstrated its commitment to helping the subsidiary overcome the natural gas crisis by providing it an eight-billion-euro credit facility comprised of both shareholder loan and parent-company guarantees.

“As the majority owner of Fortum, however, we don’t see how it’d be possible in these circumstances for Fortum to further capitalise Uniper,” she commented to the news agency.

Uniper, the largest importer of natural gas in Germany and largest buyer of Russian gas in Europe, finds itself in financial distress due to the restrictions imposed on natural gas exports by Russia. The company has received only 40 per cent of its contracted volumes of natural gas from Russia since early June, forcing it to source the replacement volumes at substantially higher prices.

The situation has seen the company incur daily losses of up to 50 million euros from its natural gas business, according to Helsingin Sanomat.

Shares in Uniper have lost almost 75 per cent of their value since the beginning of the year. Fortum owns 78 per cent of shares in Uniper.

Tuppurainen reminded that the difficulties are the result of a serious disruption in the natural gas market caused by the war waged in Ukraine by Russia and the market manipulation conducted by Gazprom, a natural gas company controlled by the Kremlin.

“This fundamental reason for high gas prices isn’t going anywhere in the near future, so this problem can’t be solved with any kind of short-term capitalisation solution as far as the main owner is concerned,” she said. “Fortum has already spent a significant sum to support Uniper. Eight billion euros is a very large sum relative to Finland’s gross domestic product.”

Executives from Fortum and Uniper are presently discussing a bailout package potentially worth as much as nine billion euros with the German government.

Aleksi Teivainen – HT

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