More European Energy Companies Pull Plug on Russian Business

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--European energy heavyweights Vattenfall (Stockholm, Sweden) and Ørsted (Gentofte, Denmark) have joined the growing number of companies cutting business ties with Russia following its military invasion of Ukraine.

Vattenfall announced that it has stopped taking deliveries of Russian nuclear fuel while Orsted has cancelled orders for Russian biomass and coal. In addition, French oil, gas and energy company TotalEnergies (NYSE:TTE) said it will make no new investments in Russia, condemning "Russia's military aggression against Ukraine, which has tragic consequences for the population and threatens Europe". However, it stopped short of pulling out of its existing business interests in the country. It is a major stakeholder in the giant Yamal liquefied natural gas (LNG) project in northern Russia, which was commissioned in 2017 and has natural gas reserves totaling more than 4 billion barrels of oil equivalent (boe). It also holds a 10% stake in Arctic LNG 2, a major LNG development located on the Gydan peninsula. Industrial Info is tracking seven Arctic LNG 2 projects worth more than $14 billion. In 2020, Russia made up almost a quarter of TotalEnergies' proven reserves and 17% of its oil and gas production.

The news comes in the same week that oil and gas majors BP plc (NYSE:BP) (London, England), Equinor (NYSE:EQNR) (Stavanger) and Shell plc (NYSE:SHEL) (London, England) announced plans to exit from their Russian business ventures amid following its invasion of Ukraine. For additional information, see March 1, 2022, article--BP, Equinor, Shell Pulling Out of Russia over Ukraine Invasion.

"We are deeply concerned by the serious security situation in Europe and Russia's invasion of Ukraine," Vattenfall stated. "We have therefore decided that no planned deliveries from Russia to our nuclear power plants will take place until further notice. We will also not place any new orders from Russia to our nuclear power plants until further notice."

Vattenfall owns 10 nuclear reactors, five of which are in commercial operation. Seven reactors are located in Sweden (four at Ringhals, three at Forsmark), and three in Germany (Brunsbüttel, Krümmel and a minority stake in Brokdorf). The German government has pledged to phase out nuclear power, and Vattenfall's three reactors will be wound down in the coming years.

It added: "Our procurement strategy is based on having multiple suppliers from different countries, in order to safeguard our independence and security of supply to our nuclear power plants. Based on this we also have plans to manage possible irregularities in the supply. The operation of our nuclear power plants will therefore not be affected by these decisions."

Vattenfall also sources its uranium supplies from Australia, Canada, Kazakhstan and Namibia.

Danish major Ørsted, the world's largest supplier of offshore windfarms, announced that it has stopped orders for Russian biomass and coal. In addition, it said that it will not enter into new contracts with Russian companies and that no direct Ørsted suppliers for the build-out of renewable energy are Russian.

"Ørsted finds the situation deeply disturbing, not least the human suffering following the war in Ukraine," it stated. "The Russian aggression goes against everything that Ørsted stands for, and we have therefore taken significant steps in accordance with our values as a company."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.