The Largest Oil & Energy Job Board

UPDATE 2-Finland takes control of gas utility as seeks to diversify supplies

* Finland buys Gasum shares from Fortum, E.ON for 510 mln euros

* State will have 75 percent stake, Gazprom remaining 25 pct

* Could restructure gas utility in the future to meet EU rules


* Govt aims to diversify supplies to cut dependence on Russia (Adds quotes, details, background)

By Jussi Rosendahl

HELSINKI, Nov 3 (Reuters) - Finland's government has agreed to buy stakes in the country's sole gas utility from Finnish firm Fortum and Germany's E.ON, giving it control as it seeks to cut its dependence on Russian gas and meet EU energy rules.

The government said it would pay a total of 510 million euros ($638 million) to boost its stake in Gasum to 75 percent from 24 percent. Russia's Gazprom, Finland's sole natural gas supplier, has the remaining 25 percent.

The European Union's energy markets directive stipulates that energy production and distribution must be run by separate companies. Gasum currently has a special permit to both own the Finnish gas grid and to sell natural gas because all natural gas consumed in Finland is imported from Russia through a pipeline.

The government has sought to increase its stake to ensure its influence as it prepares to reform the gas market and split up Gasum, if the company proceeds with its plan to build a regional or national liquefied natural gas (LNG) terminal and a pipeline to neighbouring Estonia.

Both projects are supported by the government and the European Union.

Relations between the EU and its biggest gas supplier, Russia, became strained after Moscow backed pro-Russian separatists in eastern Ukraine and Gazprom cut gas supplies to Ukraine in June. The EU receives about a third of its gas from Russia and about half of that is piped across Ukraine.

EU studies have shown that Finland could be one of the worst-affected countries in the longer run if Russia was to cut gas supplies to the bloc.

Finland's government would also consider buying Gazprom's stake in Gasum, if the Russian firm decided to sell, a senior official said on Monday.

"If such situation would come, we would have to assess it," Eero Heliovaara, a senior official from Finland's state ownership steering department, told Reuters.


The Gasum deals comes as Finland's economy is struggling to return to growth, with the government aiming to raise more than 1 billion euros by selling shares in other companies it owns.

The state will pay 310 million euros for state-controlled Fortum's 31-percent stake in Gasum, and the company said it would book a gain of 190 million euros, or 0.22 euros per share.

The state will pay about 200 million euros for German utility E.ON's stake of 20 percent.

Both E.ON and Fortum viewed their stakes in Gasum as non-core. The former said back in 2012 it wanted to sell its stake in Gasum as a part of its strategy to withdraw from Finnish and Baltic markets.

Gasum's planned projects to build an LNG import terminal and a pipeline to Estonia were put on hold a month ago due to Finnish and Estonian companies failing to agree on how they can share EU financial assistance.

The European Commission has called on Finland and Estonia to demonstrate "clear political will to accelerate the necessary investments" in the terminal and the pipeline.

If Gasum is restructured, the Finnish state is likely to retain a majority stakes in the gas grid company, while divesting the gas sales business, Heliovaara said.

"I think that in that case, the state's interest will definitely be in the grid."

(1 US dollar = 0.8000 euro) (Writing by Nerijus Adomaitis; Editing by Mark Potter and Pravin Char)

Published on:
November 3, 2014
Source url:
Copyright © 2019, OilFinity. All Rights Reserved. Powered by Talenetic Job Board Software