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    Germany suspends certification of Nord Stream 2 pipeline and causes gas prices to soar

    November 16, 2021 - CE Noticias Financieras


      The German Federal Network Agency, Germany's energy regulator, on Tuesday suspended the certification of the Nord Stream 2 gas pipeline connecting Russia and Germany as its operator did not meet all the requirements of the Berlin law. Natural gas prices in Europe rose by about 10% after the notification sent by the supervisor.

      "After a thorough examination of the documentation, the Bundesnetzagentur [regulator] concluded that it would only be possible to certify the operator of the Nord Stream 2 gas pipeline if it was registered in accordance with German law," the statement issued on Tuesday can be read.

      It adds that "Nord Stream 2 AG, based in Zug (Switzerland), has decided not to transform its existing legal form, but instead to found a subsidiary under German law solely to govern the German part of the pipeline. This subsidiary becomes the owner and operator of the German part of the pipeline. The subsidiary must then meet the requirements of an independent transmission operator as set out in the German Energy Industry Act."

      Read Also Russia Gains Power in Energy Chess

      Nord Stream 2 has been embroiled in controversy since its inception, with the US on one side, Russia on the other and Germany in the middle of the equation. Its construction was completed only this year, in September, in the Baltic Sea, with about 1,230 kilometres and an annual capacity of 55 billion cubic metres.

      In Washington, since President Barack Obama, there has been criticism of Europe's high dependence on Russia for gas supplies.

      In Germany, about 40% of imported natural gas came from Russia in 2020, but at a time when Berlin wants alternatives to coal and nuclear power, the construction allows it to have a more sustainable alternative. At the end of last year, 45 percent of the natural gas imported by the European Union came from Russia.

      Read Also Gazprom announces completion of Nord Stream 2 pipeline between Russia and Germany From Moscow comes criticism of the U.S. claiming the world's largest economy just wanted to stop its construction so it could export its own natural gas to Europe. In 2016, Washington sent the first tanker of natural gas to the "old continent" through the port of Sines and last year Europe imported 26 billion cubic meters from the US.

      To calm American nervousness, Germany established a pact with the US. Firstly, the sanctions that the latter applied to the builders of the pipeline would end and secondly, Germany had to guarantee that Ukraine would not lose importance in the natural gas transport network.

      This is because Kiev is currently the main connection point between Russia and the rest of Europe for this energy source. With Nord Stream 2, the connection is made directly between Berlin and Moscow, and there could be a risk of crossing Kiev out of this network.

      Also Read Merkel reiterates that Ukraine remains a "transit country" for Russian gas Currently, Russia has an agreement with Ukraine, which expires in 2024, to bridge the gap between the two regions. If this agreement is not renewed after the estimated deadline, it could mean a loss of revenue of between one billion and three billion euros, per year, for Ukrainian coffers.


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