E.ON Flags Risks to Nord Stream 1 Stake

   By Eric Reinhard and Ed Frankl 
 

E.ON SE said Wednesday that it sees a high level of uncertainty and additional risks due to the war in Ukraine, including to the valuation of its stake in the Nord Stream 1 pipeline.

However, the German energy supplier said it wouldn't divest its stake in Nord Stream 1, which delivers gas from Russia to Germany through the Baltic Sea, though a downgrade in valuation would hit pension provisions.

E.ON has a 15.5% stake in Nord Stream 1 via holding company Nord Stream AG, but not in the new Nord Stream 2, the commissioning of which has been put on hold in response to Russia's invasion of Ukraine.

There is no market for Nord Stream 1, but it also wouldn't help the situation if E.ON were to sign over its stake to the pipeline's majority shareholder Gazprom to do what they wanted with the asset, the energy supplier said.

The effects of the conflict on the business can't be estimated accurately, and are therefore not included in forecasts for 2022, the Essen-based company said.

To maintain the security of supply, E.ON said the answer would be in diversifying energy imports including through liquefied natural gas and hydrogen infrastructure.

"In the long term we must and we will fundamentally end the energy dependence on Russia. There is no way around it." E.ON Chief Executive Leonhard Birnbaum said in a press conference.

The company has no long-term supply contracts directly with Russian producers, the CEO said.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

March 16, 2022 09:12 ET (13:12 GMT)

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