© Reuters. FILE PHOTO: The logo of German electricity supplier RWE is pictured at the RWE headquarters in Essen, Germany, on November 15, 2021. REUTERS/Thilo Schmuelgen
By Christoph Steitz and Tom Käckenhoff
FRANKFURT (Reuters) – RWE said on Friday that one of its long-term natural gas contracts with Russian suppliers is dormant, limiting Germany’s largest power producer’s exposure if supplies are disrupted by the Ukraine crisis.
Shares of German gas suppliers took a hit on fears that if supplies from Russia were suspended or reduced, they could be forced to buy fuel at higher prices on the spot market to fulfill contracts.
RWE, which has a long-term gas contract with Gazprom (MCX: ), told Reuters there was no risk to the company because the contract was on hold, and its shares extended gains and rose as much as 6.1% on comments.
Along with Uniper, RWE is one of Germany’s main importers of Russian gas, and the company also said it has in total contracted with Russia for gas supplies of up to 15 terawatt-hours (TWh) by 2023.
Half of them will be available within the next 12 months, it added.
In a note to clients, Bernstein said that was significantly lower than its own estimate of 50 TWh. “As a result, the impact of a 20% reduction in trading volume is assumed to be less than 300 million euros ($329 million), well below our estimate of 1.8 billion euros,” the brokerage said.
RWE did not provide any further details, including the identity of the supplier.
(1 USD = 0.9107 EUR)
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