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Natural gas prices at the key European hubs jumped to three-week highs on Tuesday after Germany said it had suspended the process of certification of the Russia-led Nord Stream 2 gas pipeline.
The German Federal Network Agency of Germany, Bundesnetzagentur, said it suspended on Tuesday the procedure to certify Nord Stream 2 AG as an independent transmission operator until an operator of the pipeline in Germany is incorporated under German law.
The agency, which had until January 8, 2022, to express an opinion on the operating license, deals a blow to the pipeline and dashes hopes that it could start sending gas to Germany in time to save Europe from a gas crunch if this winter is colder than usual.
“The certification procedure will remain suspended until the main assets and human resources have been transferred to the subsidiary and the Bundesnetzagentur is able to check whether the documentation resubmitted by the subsidiary, as the new applicant, is complete,” the German agency said.
After news of the German suspension of the certification process broke, European gas prices jumped to three-week highs, also amid anxiety about how Russia will react to the suspension of the certification.
“Any remaining hopes that this pipeline would be available for the winter are completely dashed now,” James Waddell at Energy Aspects told the Financial Times.
Commenting on the Nord Stream 2 news, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said: “It will be interesting to see the reaction from Gazprom/Putin with the market clearly worried about the promised and not yet proper delivered pickup in supplies.”
Dmitry Marinchenko, Senior Director at Fitch Ratings, told Russian news agency TASS that “The case is more probably with procedural, rather than political point. Germany supports the project consistently and there is no use in looking for conspiracy in this case.”
Still, the situation “creates uncertainty on the market — it is unclear so far whether Gazprom is ready to significantly increase supplies to Europe before Nord Stream 2 launch,” Marinchenko added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.