Nord Stream 2, the controversial pipeline, may yet flop, according to the co-leader of the European Greens, Reinhard Butikofer.
In an interview with German dpa, the co-chair of the Green Party in the European Parliament said there are still obstacles that Nord Stream 2 needs to clear before it is put into operation, and even after it clears them, the European Commission could still stop the project and turn it into an "investment ruin."
Nord Stream 2 is set to expand the capacity of an existing pipeline under the Baltic Sea to Germany twofold, to 110 billion cubic meters annually. It has exacerbated bilateral problems between Russia and the EU because its route bypasses Ukraine, which relies on Russian gas transit fees for much of its budget revenues.
At the same time, there is a concern that more Russian gas coming into Europe will make it more vulnerable to Russian political pressure.
Be that as it may, much of Europe is currently finding itself in dire need of natural gas amid lower than normal inventories and strongly rising demand that has led to a surge in gas prices.
"The shout of triumph with which the Russian side is celebrating the completion of the Nord Stream 2 pipeline is premature," Butikofer told dpa. He then went on to list three challenges still remaining for Gazprom.
First, it needs to unbundle its gas production operations from its gas infrastructure operations. The unbundling rule aims to prevent gas monopolies. Second, Gazprom must give third parties the right to feed gas into the pipeline, which it has not yet done. Third and last, the Nord Stream 2 pipeline needs to receive the go-ahead from the German authorities, which is also pending.
Yet even if the German authorities grant Gazprom and its Nord Stream partners a permit for the pipeline, the European Commission can cancel it if it finds the project violates European energy law, the EP official explained.
By Irina Slav for Oilprice.com
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The EU couldn’t turn Nord Stream 2 into investment ruin even if it wished because President Putin will turn the tables on it and stop supplying gas to the EU and let it shiver in the cold winter with no chance whatsoever of being able to replace Russian gas supplies.
Moreover, Putin could easily shift the entire supplies destined for the EU to China without betting an eyelid. The Americans and the EU Secretariat have been accusing Putin’s Russia of tightening its grip on the EU’s energy security. If this is the case, then Putin will show them how it works.
The EU Secretariat should rise above its narrow-minded attitude towards Nord Stream 2 and prevail upon Germany’s regulator to issue an immediate temporary operational licence to Nord Stream 2 before the onset of winter rather than wait until the 8th of January 2022 to decide to certify Nord Stream 2.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London