The Dutch energy supplier Eneco has announced that it will no longer conclude contracts for the supply of Russian gas and will not extend current contracts due to the invasion of Ukraine. The company’s CEO, As Tempelman, explained that these are contracts with suppliers with Russian shareholders. Currently, almost 15% of the gas sold comes from Russia.
In particular, Eneco, which is also active in Belgium, has a long-term contract with Germany’s Wingas, a subsidiary of Russia’s Gazprom, which runs until 2030.
But the energy distributor does not want to break its commitment. According to Mr. Tempelmans, the released natural gas could then be sold by Russia at a higher price. Moreover, such a decision could jeopardize the “Security of supply at a reasonable price” his customers.
In 2021, Eneco recorded an increase in sales of 26% to 5.2 billion euros thanks to increased electricity and gas prices. This enabled a profit of 209 million euros (+77% compared to the previous year) to be achieved. Part of these profits – 49 million euros – are due to the sale of shares in other companies.
However, the company claims to have made less money from its customers due to higher and more volatile purchase prices. In addition, due to weak winds in 2021, Eneco produced less electricity with its wind turbines and therefore had to buy more electricity on the market at high prices in the short term.
Steel giant ArcelorMittal bans Russian raw materials
Steel giant ArcelorMittal has removed all Russian raw materials from its production process. For example, Europe’s largest steel company had previously bought coal and iron ore from Russia. “We are now independent‘ said Geert Van Poelvoorde, the CEO of ArcelorMittal’s European subsidiary. Governments and companies in the old continent are trying to reduce their dependence on natural gas, oil, coal, metals and other commodities from Russia – which is also pushing up prices .Russia is also a very important supplier of iron ore and coal for European blast furnaces.
ArcelorMittal spent three weeks wondering how to stop being dependent on Russian raw materials. “We are now independent“says the Belgian Van Poelvoorde.”In the third quarter we need to buy a little more “non-Russian” products. But that’s no big deal.“
In the past, the company has said that about a fifth of the coal used in its European power plants comes from Russia. According to the annual report, the company also previously bought iron ore from Metalloinvest. Metalloinvest is the company of Alisher Usmanov, one of Russia’s struggling oligarchs.
According to Van Poelvoorde, the war in Ukraine is changing global commodity trading. In the future, Russia will no longer target its coal exports to Europe, but to China. China would then buy less coal from Australia. “Russians have always been very opportunistic“, says Van Poelvoorde.”There will be a new balance all over the world.“Currently, half of the coal used in the European steel industry comes from Russia.
Arcelor has its own iron ore and steel coal mines. This makes it easier to search for other providers. This is likely to be more difficult for other steel companies.
TotalEnergies says no more Russian oil
For its part, the French group TotalEnergies announced its decision to stop all purchases of Russian oil or petroleum products, “by the end of 2022 at the latest“.
The company, which has come under fire for not leaving Russia, said in a statement: “additional measures“Face”to escalate the conflict” in Ukraine.