Germany's Uniper focused on meeting gas demand to mid-2030s
(Reuters) - Uniper will stick to its core gas business as demand for the fuel continues into the middle of the next decade, at the same time as investing in carbon-free energy, Chief Executive Michael Lewis told Reuters on Wednesday.
The company, which had to be rescued by Berlin after the crisis caused by disruption of Russia's war on Ukraine, has found alternatives to replace Germany's former top supplier Gazprom and does not expect an early end to gas demand.
"Germany will need gas at least into the mid-2030s," Lewis said on the sidelines of a Handelsblatt energy conference in the German capital.
"We are Germany's biggest importer. We want to keep this position."
Gazprom in 2022 reduced and later fully suspended supplies via the Nord Stream pipeline from Russia to Germany, which Western governments say was blown up by unknown saboteurs.
Uniper was forced to buy gas at extremely high prices on the spot market and became the biggest European corporate casualty of the energy crisis, prompting the German government to take a 99% stake to avoid its collapse.
The situation improved in 2023 after gas prices retreated from record levels.
Uniper reported a strong profit outlook for 2024 and the cost of the state bail-out has shrunk to less than half the amount initially expected.
The German government must cut its stake to 25% plus one share by end-2028.
"If the federal government pulls out, it may well end up receiving more money than it invested in equity in Uniper," Lewis said.
He also said Uniper was ready to build "several gigawatts (GW)" of new gas turbines for later conversion to clean hydrogen under a power plant scheme that the government is set to agree shortly.
The plan, with an estimated cost of up to 40 billion euros ($43.5 billion), aims to ensure enough electricity generation until renewable energy can overcome storage issues and inadequate grid technology to fully replace fossil fuels.
This will be achieved via 24 GW of gas-fired and hydrogen capacity by 2035 that will be a combination of purpose-built stations and old ones that are converted.
"When the strategy comes, we can start immediately. The plans are ready," Lewis said, adding construction would take five years.
The company would also invest in solar and wind, pull out of coal before 2030 and develop ammonia import and cracker facilities to produce green hydrogen, he said.
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