German gas giant Uniper says the worst is still to come after Russia halts flows to Europe

German energy giant Uniper on Tuesday warned the worst is still to come as concerns over Russian gas supplies to Europe through fall and winter continue to push up prices.

“I have said this a number of times now over this year and I’m educating also policymakers. Look, the worst is still to come,” Uniper CEO Klaus-Dieter Maubach told CNBC’s Hadley Gamble at Gastech 2022 in Milan.

“What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times. That is why I think we need to have really an open discussion with everyone taking responsibility on how to fix that,” he added.

Russia’s state-owned energy giant, Gazprom, on Friday indefinitely halted gas flows to Europe via a major pipeline, stoking fears that parts of Europe could be forced to ration energy through winter.

Uniper, as Germany’s biggest importer of gas, has been hit hard by vastly reduced flows via pipelines from Russia, which have sent prices soaring.

The German government agreed in July to bail out Uniper with a 15 billion euro ($14.9 billion) rescue deal to provide the embattled company with some financial relief. Maubach said Tuesday that some of the details still needed to be ironed out with this stabilization package.

Russia’s halt to supplies via Nord Stream 1 and the subsequent spike in European gas prices are likely to exacerbate the situation for the company.

Shares of Uniper were 3.5% lower on Tuesday morning. The Frankfurt-listed stock is down more than 88% year to date.

Gazprom’s announcement came shortly after the Group of Seven economic powers backed a plan to propose a cap on the price of Russian oil.

Gazprom said the shutdown was due to an oil leak in a turbine. The Nord Stream 1 pipeline, which connects Russia to Germany via the Baltic Sec, had been scheduled to reopen on Saturday after three days of maintenance work.

The Kremlin has since blamed European lawmakers for the halt to gas supplies via Nord Stream 1, saying economic sanctions imposed by the West following Russia’s invasion of Ukraine had impeded repair work.

It was widely interpreted as the clearest indication yet that Russia is likely to push for Europe to lift punitive economic sanctions in order for Moscow to turn the taps back on.

EU policymakers have accused the Kremlin of weaponizing energy supplies in a bid to sow uncertainty across the 27-nation bloc and boost energy prices amid Russia’s onslaught in Ukraine. Moscow denies using energy as a weapon.

Asked whether it was possible that Uniper could work again with Gazprom should the Kremlin’s war with Ukraine come to an end, Maubach said the company’s relationship with Russia stretched back to the 1970s and he had personally defended Gazprom as a reliable energy supplier after the war started with Ukraine in late February.

“That, in hindsight, maybe it was even a mistake to think that gas would not be used. Maybe it was just wishful thinking,” Maubach said.

“I think this partnership is broken and I don’t think that we can reestablish that in the next weeks, months and years to come. So, we are focusing on replacing Russian gas,” he added.