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Germany Halts Nord Stream 2 After Putin Orders Tanks Into Ukraine

Germany has suspended the Russia-led natural gas pipeline project Nord Stream 2 after Russian President Vladimir Putin recognized late on Monday two separatist regions in eastern Ukraine and deployed troops there in the most serious escalation of the crisis yet.

Germany, the endpoint of Nord Stream 2, has been hesitant in the past to move against the gas pipeline, but the latest escalation seems to have tipped the scales in favor of Berlin reacting strongly to the Russia-Ukraine crisis.

“We now have to reassess the dramatically changed situation: This also applies to Nord Stream 2,” German Chancellor Olaf Scholz said on Tuesday, adding that “The certification cannot take place now.”

Scholz has asked the Federal Network Agency of Germany, Bundesnetzagentur, to analyze again the security of supply, the Chancellor added. 

In November, the agency had suspended the procedure to certify Nord Stream 2 AG as an independent transmission operator until an operator of the pipeline in Germany was incorporated under German law.

The pipeline construction is complete, but Nord Stream 2 was awaiting full regulatory clearance from Germany and a review by the European Union over its compliance with EU energy regulations.

However, in light of the latest events, Germany is now putting Nord Stream 2 on ice.

Germany has secured its gas supply even without additional volumes that would have come through North Stream 2, German Vice-Chancellor and Economy Minister Robert Habeck said on Tuesday.

Dmytro Kuleba, the foreign minister of Ukraine, tweeted, “I welcome Germany’s move to suspend the certification of Nord Stream 2. This is a morally, politically and practically correct step in the current circumstances. True leadership means tough decisions in difficult times. Germany’s move proves just that.”

Separately, the EU, the UK, and the U.S. are each currently drafting sanctions against Russia, which would be announced as early as today.

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Following the news that Germany halts Nord Stream 2, European gas prices jumped, especially for gas for delivery later this year and in 2023.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on February 22 2022 said:
    This is a bit of bravado by Germany but it won’t last long. It is just a temporary suspension of the certification of Nord Stream 2 gas pipeline.

    Germany and the European Union (EU) have no alternative but to eventually certify Nord Stream 2 because it is essential for their energy security.

    Germany depends on Russia for 65% of its gas and oil needs.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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