Uniper, the German energy giant that owns and operates seven UK power stations, is in talks with its local government over possible support after a massive profit warning.
As one of the biggest, if not the biggest, of Europe's individual buyers of Russian gas, the company warned that underlying profits (EBIT) were likely to be “significantly below” previous years as it is getting just 40% of the gas ordered from Russia’s Gazprom in the past fortnight.
It said it is having to buy gas from elsewhere at "significantly higher prices", and as it cannot currently pass on these additional costs, "this results in significant financial burdens".
Uniper boss Klaus-Dieter Maubach said the group is “now talking to the German government again about stabilisation measures, for which a number of instruments can be considered, such as guarantees and collateral, an increase in the current credit facility and equity investments”.
Russia has reduced Nord Stream gas flows by 60% two weeks ago on the back of an alleged disruption over supplies of parts from Siemens.
In the UK, Uniper owns and operates seven power stations, a fast-cycle gas storage facility and two high pressure gas pipelines, from Theddlethorpe to Killingholme and from Blyborough to Cottam, as well as the Grain LNG terminal in Kent.
Uniper shares fell over 20% to below €13 for the first time since 2016.
George Saravelos, global head of FX research at Deutsche Bank, said the energy situation in Germany was very worrying: "If the gas shutoff is not resolved in coming weeks we worry this will lead to a broadening out of energy disruption with material upfront effects on economic growth, and of course much higher inflation," said Saravelos.