E.ON slashes value of investment in Nord Stream 1 by almost £600m | E.ON

Energy grid operator E.ON has reduced the value of its investment in the Nord Stream 1 gas pipeline by about €700 million (£592 million) due to “increased uncertainties” following Russia’s invasion of Ukraine.

The German utility had said in March that its 15.5% stake – which E.ON holds indirectly through its pension fund – had a book value of €1.2 billion, so the revaluation represents a 58% decline in value.

The Nord Stream company owns and operates two pipelines each stretching 1,224 km (761 miles) to bring natural gas from Russia to Germany.

Read:Male bankers at NatWest take 1 year of paternity leave

Germany halted the certification process for the controversial Nord Stream 2 pipeline in late February, days before Russia’s full-scale invasion of its neighboring country, after Moscow recognized the self-proclaimed republics of Luhansk and Donetsk in eastern Ukraine.

Leonhard Birnbaum, CEO of E.ON, said: “The current energy crisis finally makes it clear that Europe needs to transform its energy system. Being independent from Russian gas. To guarantee security of supply.”

In publishing its latest annual results in March, E.ON warned of “valuation risks to investments”, including its stake in Nord Stream 1, which is majority owned by Russian state energy company Gazprom.

Gas flow to Europe via Nord Stream 1 has been reduced to approximately 20% of the pipeline’s usual capacity in recent weeks, half the amount delivered since the resumption of service after maintenance.

Gazprom has attributed the reduced gas flow to technical problems with the pipeline’s turbines, a statement dismissed by the German government as a fabricated pretext.

E.ON described the situation in the energy markets as “tense”, while Birnbaum added: “We are helping Germany and our European markets to respond to the extraordinary crisis in the short term and are also working to create long-term energy security by accelerate the energy transition.”

E.ON – the UK’s largest energy supplier with approximately 3.8 million customers – also reported January to June results, which showed a 15% decline in adjusted profit for the first half to €4.06 billion. It maintained its 2022 outlook for full-year adjusted profit before tax between €7.6 and €7.8 billion.

Previous post
Samsung’s Galaxy Unpacked is a foldable party of one
Next post
Teenager arrested on suspicion of murdering fellow schoolboy Deshaun James Tuitt | UK News