Fortum considers all options to save Uniper and mitigate gas crisis

Finnish utility Fortum is continuing talks with the German government to mitigate financial risks, as German subsidiary Uniper suffers significant losses due to Russian gas curtailment.

The discussions have yet to yield concrete results and decisions, however Fortum has made it clear that urgent and decisive action needs to be taken to prevent further losses.

Minister for European affairs and ownership steering Tytti Tuppurainen said the parties are continuing to weigh up a number of options. “The discussions are in an intense and sensitive phase…there’s still a lot of work to be done.”

Fortum’s president and CEO Markus Rauramo said in a statement: “Faced with new geopolitical realities, we have to consider all options that will ensure security of supply and the stability of the European energy markets in the long run. I am very pleased that our main owner, the State of Finland is supporting us in reaching the solution.

“We are ready and very committed to continue working with relevant parties at the table towards a responsible solution that takes the needs of all stakeholders, including customers and employees into account. In this crisis, brought about by Russia alone, we all have to give something up to safeguard the future,” added Rauramo.

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Discussions are continuing after Uniper filed for government support last week (8 July 2022) under newly amended German legislation.

According to Fortum, since mid-June, Uniper has received only 40% of the contracted gas volumes from Russia and has therefore had to secure replacements at much higher prices, a situation resulting in a profit warning at the end of June.

The outcome of negotiations with Berlin therefore must take these compensation mechanisms into account, end Uniper’s financial losses and improve the company’s credit rating – all while accounting for the unreliable gas flow from Russia which may not improve.