By Dominic Chopping

 

Finnish energy group Fortum Oyj said it will stop all new investment projects in Russia and reduce its thermal exposure in the country.

Fortum has seven thermal heat and power plants in Russia while its Uniper SE subsidiary has five power stations there.

"Business as usual cannot continue," Chief Executive Markus Rauramo said.

"For now, we have stopped all new investment projects in Russia until further notice and we will continue to reduce our thermal exposure in Russia."

Fortum's Russian operations represented around 20% of the group's 2021 comparable operating profit, while around half of Uniper's long-term gas contracts are sourced from Russia. The group's Russian generating assets and its exposure in the Nord Stream 2 pipeline project carry a book value of roughly 5.5 billion euros ($6.12 billion), it added.

All of the company's operations in the country are currently running as normal, but Fortum cautioned that the situation is very dynamic, making it difficult to predict the extent of any effect on operations in the future.

In a separate announcement Thursday, Fortum said it has decided against selling its electricity retail business and Polish district heating business, instead deciding to develop the businesses as part of the group.

In addition, it said it has decided to apply for a new operating license for both units at its Loviisa nuclear power plant in Finland until the end of 2050. Investments related to continuing of operations and the lifetime extension will amount to an estimated EUR1 billion, it said.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

March 03, 2022 04:02 ET (09:02 GMT)

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