Unphased by record high gas prices and a looming supply shortage, the German regulator BNetzA has halted the approval process of Nord Stream 2 – the controversial Russian interconnector through the Baltic Sea. Some European utility buyers have no choice but to turn to spot LNG, though available cargoes are hard to come by.
Disregarding the risk of fuel shortages, BNetzA “preliminary halted” the certification process until Swiss-based Nord Stream AG has founded a subsidiary under German law to own parts of the pipeline – a request set to delay matters until summer 2022.
Built at a cost 11 billion Euros and over a time of three years, Nord Stream 2 was meant to start supplying first gas from Russia to Germany before Christmas. By October 2021, already, the first pipeline leg was filled with gas and the second leg was ready to start deliveries in late December – but Gazprom was not permission to do so.
Analysts warn the German regulator and EU policy makers may ultimately derail the multi-billion pipeline project. This move would exacerbate the risk of gas supply shortages in German at a time when the country simultaneously exits coal and nuclear power.
Staying adamant the regular said it will not continue approval process until Nord Stream AG has transferred all financial assets on German soil and key personal to the new subsidiary. This new entity has to fulfil the unbundling requirements of an independent transmission operator.
The state gas companies of Poland and Ukraine – PGNiG and Naftogaz – were notified and approve of these proceedings. Both countries have been the most outspoken critics of Gazprom-led direct interconnector to Germany, Europe’s largest gas market, where total annual gas consumption reached 1,013 billion kilowatt-hours in 2021, up 5 percent from the previous year, according to BDEW figures.