Wintershall Dea expects compensation if Nord Stream 2 prevented

German gas supplier Wintershall Dea said in a report on February 24 that it expected compensation for the €730mn ($815mn) it has invested in Russia's Nord Stream 2 gas pipeline if the project is never commissioned.

Wintershall Dea's statement comes a day after Germany's government announced it was halting the certification process needed for Nord Stream 2 to flow gas in response to Russia's recognition of Ukraine's breakaway regions of Donetsk and Lugansk as independent. Russia has since launched a full-scale invasion of the rest of the country.

Wintershall Dea is one of five European energy companies that have lent money to Russia's Gazprom for the pipeline's construction, alongside Shell, Uniper, Engie and OMV.

"Even if there might be a delay in commissioning due to the not yet completed certification process, we expect that the contractual obligations towards the financial investors will be fulfilled," Wintershall Dea said in a statement. "“Should the commissioning of Nord Stream 2 be prevented by political intervention, we assume that the project company will be able to enforce compensation claims. Currently, Wintershall Dea sees no reasonable scenario in which there will be political intervention without compensation."

Wintershall Dea reported strong financial numbers for 2021, including a growth in EBITDAX to €3.83bn ($4.3bn), from €1.64bn in 2020 and €2.8bn in 2019, on the back of soaring gas prices. Adjusted net income came to €950mn, versus €195mn in 2020, while free cash flow soared to €2.08bn, from only €159mn in the previous year. The company's leverage also fell to 0.7 from 3.4.

In addition to higher prices, Wintershall Dea also benefited from an increase in production to 634,000 barrels of oil equivalent/day, from 623,000 boe/d.