Uniper says worst is still to come as Russia halts gas flows to Europe

German power big Uniper on Tuesday warned the worst is still to come as considerations over Russian gas provides to Europe by fall and winter proceed to push up costs.

“I have said this a number of times now over this year and I’m educating also policymakers. Look, the worst is still to come,” Uniper CEO Klaus-Dieter Maubach informed CNBC’s Hadley Gamble at Gastech 2022 in Milan.

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“What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times. That is why I think we need to have really an open discussion with everyone taking responsibility on how to fix that,” he added.

Russia’s state-owned power big, Gazprom, on Friday indefinitely halted gas flows to Europe through a serious pipeline, stoking fears that components of Europe might be compelled to ration power by winter.

Uniper, as Germany’s greatest importer of gas, has been hit onerous by vastly lowered flows through pipelines from Russia, which have despatched costs hovering.

Uniper has requested billions in monetary help from the German authorities as a results of surging gas and electrical costs.

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The German authorities agreed in July to bail out Uniper with a 15 billion euro ($14.9 billion) rescue deal to present the embattled firm with some monetary aid. Maubach mentioned Tuesday that a few of the particulars still wanted to be ironed out with this stabilization package deal.

Russia’s halt to provides through Nord Stream 1 and the next spike in European gas costs are seemingly to exacerbate the scenario for the corporate.

Shares of Uniper have been 3.5% decrease on Tuesday morning. The Frankfurt-listed inventory is down greater than 88% 12 months to date.

Partnership with Gazprom is ‘damaged’

Gazprom’s announcement got here shortly after the Group of Seven financial powers backed a plan to suggest a cap on the value of Russian oil.

Gazprom mentioned the shutdown was due to an oil leak in a turbine. The Nord Stream 1 pipeline, which connects Russia to Germany through the Baltic Sec, had been scheduled to reopen on Saturday after three days of upkeep work.

The Kremlin has since blamed European lawmakers for the halt to gas provides through Nord Stream 1, saying financial sanctions imposed by the West following Russia’s invasion of Ukraine had impeded restore work.

It was broadly interpreted as the clearest indication but that Russia is seemingly to push for Europe to carry punitive financial sanctions to ensure that Moscow to flip the faucets again on.

EU policymakers have accused the Kremlin of weaponizing power provides in a bid to sow uncertainty throughout the 27-nation bloc and increase power costs amid Russia’s onslaught in Ukraine. Moscow denies utilizing power as a weapon.

Asked whether or not it was attainable that Uniper may work once more with Gazprom ought to the Kremlin’s conflict with Ukraine come to an finish, Maubach mentioned the corporate’s relationship with Russia stretched again to the Nineteen Seventies and he had personally defended Gazprom as a dependable power provider after the conflict began with Ukraine in late February.

“That, in hindsight, maybe it was even a mistake to think that gas would not be used. Maybe it was just wishful thinking,” Maubach mentioned.

“I think this partnership is broken and I don’t think that we can reestablish that in the next weeks, months and years to come. So, we are focusing on replacing Russian gas,” he added.

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