VNG plans investments in green gases, turned to profits in 2023
(Reuters) - VNG, an east German gas subsidiary of power utility EnBW, said it will invest up to $5.31 B by 2035, mostly in green gases.
VNG used to be one of Germany’s biggest importers of Russian natural gas but lost its pipeline supplies in 2022's energy crisis when Russia turned off gas export taps to the West.
The company has turned itself around and on Tuesday reported adjusted earnings before interest and taxes (EBIT) for 2023 of 447 million euros following a loss of 205 million in 2022, and an operating profit of 380 million euros after a loss of 337 million euros in 2022.
"Our economic success provides the financial stability to spur the necessary investment in the transformation of the energy system in a continuous and ambitious fashion," said board member Bodo Rodestock, detailing earnings in 2023.
However, Chief Executive Ulf Heitmueller said profit in 2024 would not be as high as in 2023.
"We expect a normalization of the market and with that also one in the group's results," he said.
In the past two years VNG has worked with a raft of new partners to procure both pipeline and liquefied natural gas (LNG) from new sources, for example with Algeria's Sonatrach.
As well as gas sales to local utilities and industry, the group has a wide range of activities in high pressure and distribution gas pipelines, storage facilities and biogas.
Gas, which still accounts for 25% of German primary energy consumption, under the lead of the Berlin government's energy strategy, is undergoing a long-term transformation to being sourced from renewable energy sources, mainly to make green hydrogen.
Earlier this month, the government agreed a financing mechanism for a future hydrogen transport network.
VNG's transport subsidiary Ontras plans to operate a pipeline for green gases between Bad Lauchstaedt and the Leuna chemicals industry park from the second half of 2025 onwards.
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