On Tuesday, Germany’s Federal Network Agency temporarily suspended the certification of Nord Stream 2, an undersea Russian gas pipeline built to transport natural gas directly from Russia to Germany, saying it fails to comply with German law.
In its ruling, the German energy regulator said, “The operating company did not meet conditions to be an independent transmissions operator, and it could be certified only if that operator was organised in a legal form under German law.” The evaluation can be renewed once the company meets bureaucratic requirements. German officials also said the certification would remain suspended until human resources and main assets are transferred to the subsidiary.
The suspension comes after Swiss-based company Nord Stream 2 AG opened a subsidiary under German law, but only for the section of the pipeline that falls in Germany.
Nord Stream 2 said they have been notified of the decision and cannot comment on the details of the procedure or how it would impact the operation of the pipeline. An analyst at Energy Aspects said, however: “This does push back expected timelines quite a bit.”
The decision has effectively barred the recently completed pipeline from supplying gas to Germany amid soaring energy prices across Europe and political tensions between the European Union (EU) and Russia over the Poland-Belarus migration crisis and Russia’s military build-up in Ukraine.
Germany’s Green Party lawmaker Oliver Krischer hailed the decision and accused Gazprom of not taking German and European law seriously.
While the Kremlin was unavailable for comments, Konstantin Kosachyov, the deputy chairman of Russian parliament’s upper house, said, “Any delays in the pipeline certification, all the more so on the eve of winter, is not in the interests of the European Union, that’s without any doubt.”
The development has led to a sharp increase in natural gas prices at the European market, with the cost of British natural gas soaring by more than 9% and European gas by 11%. Russian President Vladimir Putin has urged German regulators to approve the pipeline to ease the energy crunch and control the soaring prices. During an energy conference in October, Putin said Moscow would increase supplies to Europe once the pipeline received approval from the regulator.
The ruling also comes at a time when German Chancellor Angela Merkel, a firm supporter of the pipeline, has taken up a caretaker role until a new coalition government, including Green Party, Free Democratic Party, and Social Democrats, led by Olaf Scholz, takes over. It has been reported that the new coalition might be less favourable to Merkel’s energy project.
Top European leaders have earlier accused Putin of intentionally cutting the supply of natural gas to Europe to seek faster approval for Nord Stream 2.
The gas pipeline has been a point of contention between Germany, the United States (US), Brussels, and Ukraine for some time now. The US has long opposed the construction of Nord Stream 2, citing the threat of Russia weaponising Europe’s increased dependence on it for energy. However, President Joe Biden’s administration has withdrawn sanctions threats, saying the pipeline’s completion could not be stopped without Germany’s support. Likewise, Ukraine also continues to oppose the pipeline, citing the weaponisation of energy by Russia and the loss of valuable transit fees.