REG-Ørsted A/S Ørsted updates investors on the company's exposure to gas contract with Gazprom Export

Oersted A/SAnnouncement

07/03/2022 13:00

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   Ørsted A/S (Orsted)
   Ørsted updates investors on the company's exposure to gas contract with
   Gazprom Export

   07-March-2022 / 13:50 CET/CEST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   7.3.2022 13:50:34 CET | Ørsted A/S | Investor News

   Ørsted condemns the Russian invasion of Ukraine and has already taken
   several steps to stop its cooperation with Russian companies.

   Ørsted has ceased all sourcing of biomass and coal from Russia for its
   power stations, Ørsted will not enter into new contracts with Russian
   companies, and Ørsted has made sure that none of Ørsted's direct suppliers
   for the build-out of renewable energy are Russian.

   Concerning Ørsted's gas purchase contract with Gazprom Export:

     • Ørsted has a long-term take-or-pay gas purchase contract with Gazprom
       Export. The contract was entered into in 2006 and expires according to
       its terms in 2030. The contract cannot be terminated at this point in
       time. The contract will not be extended.
     • A long term take-or-pay contract was the industry standard for
       procuring gas at the time of signing.
     • Under the contract, Ørsted receives approximately 20 TWh of gas per
       year. Ørsted will offtake the minimum yearly volume of gas under the
       contract. Ørsted's financial exposure is significantly less than 20
       TWh per year, as explained below.
     • The gas is delivered in Germany and forms part of Ørsted's sourcing
       strategy towards our Danish and Swedish business-to-business and
       wholesale customers. Any gas volumes not transported to Denmark and
       Sweden are sold in Northwestern Europe.
     • Currently, imports of gas cover a substantial part of Danish and
       European gas consumption, and therefore, it will have severe societal
       consequences if Europe experiences shortfalls in gas supplies.
     • Gas is no longer a core business for Ørsted, and accordingly, Ørsted's
       gas sourcing contracts are handled as a low-risk, low margin
       business. In line with this policy, Ørsted seeks to limit any
       financial exposure related to the Gazprom Export contract.
     • The main financial exposure relates to the price at which Ørsted
       purchases the gas from Gazprom Export, where Ørsted - under normally
       functioning market conditions - seeks to lock-in the margin by hedging
       (i.e. forward selling) the gas a few months ahead.
     • Ørsted is now taking steps to balance the risk against a scenario
       where the supply of Russian gas is disrupted or sanctioned by reducing
       the overall hedge level related to the Gazprom Export contract. 
     • Subject to approval at the upcoming annual general meeting in April,
       Ørsted will donate all net profits (if any) after hedges and tax
       related to the Gazprom Export contract to humanitarian aid in Ukraine.

   Ørsted supports any political initiative to become independent of Russian
   gas as well as any political import sanctions that may be imposed. Any
   such initiatives will be immediately and strictly implemented.

   The information provided in this announcement does not change Ørsted's
   financial outlook for the 2022 financial year or the expected investment
   level announced for 2022.

   For further information, please contact:

   Media Relations
   Carsten Birkeland Kjær
   + 45 99 55 77 65
    1 cabkj@orsted.com

   Investor Relations
   Allan Bødskov Andersen
   + 45 99 55 79 96
    2 ir@orsted.com

   About Ørsted
   The Ørsted vision is a world that runs entirely on green energy. Ørsted
   develops, constructs, and operates offshore and onshore wind farms, solar
   farms, energy storage facilities, renewable hydrogen and green fuels
   facilities, and bioenergy plants. Moreover, Ørsted provides energy
   products to its customers. Ørsted is the only energy company in the world
   with a science-based net-zero emissions target as validated by the Science
   Based Targets initiative (SBTi). Ørsted ranks as the world's most
   sustainable energy company in Corporate Knights' 2022 index of the Global
   100 most sustainable corporations in the world and is recognised on the
   CDP Climate Change A List as a global leader on climate action.
   Headquartered in Denmark, Ørsted employs 6,836 people. Ørsted's shares are
   listed on Nasdaq Copenhagen (Orsted). In 2021, the group's revenue was DKK
   77.7 billion (EUR 10.4 billion). Visit  3 orsted.com or follow us on
   Facebook, LinkedIn, Instagram, and Twitter.

       Attachments

     •  4 Ørsted updates investors on the company's exposure to gas contract
       with Gazprom Export.pdf

   News Source: Ritzau

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   ISIN:          DK0060094928
   Category Code: MSCM
   TIDM:          Orsted
   Sequence No.:  147412
   EQS News ID:   1296199


    
   End of Announcement EQS News Service

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References

   Visible links
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   2. mailto:ir@orsted.com
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