Nord Stream 2 Too Late To Alleviate Europe's Winter Gas Crunch

The controversial Russia-led natural gas pipeline Nord Stream 2 will likely get approval from German and EU regulators, but this approval could also likely come too late to ease the gas shortages in Europe this winter season.

German authorities have signaled that they would certify the pipeline, which is completed and awaits an operational license from Germany. But the German authorization, expected no later than January 8, 2022, will then need a review of the European Commission, which is non-binding but has to find whether the pipeline and its operation complies with EU rules.

The EU has two months to decide and another two months to stall a decision, which could push the first actual gas flows on Nord Stream 2 to well beyond the winter season in Europe, to May 8, Bloomberg's Patrick Donahue notes.

Some analysts and EU member states such as Poland accuse Russia of using gas and energy as a weapon to continue exerting influence on the European gas market. The Kremlin, Vladimir Putin, and all Russian officials deny those accusations. 

Russia signaled last week it would start filling European storage sites once Gazprom completes the filling of the Russian storage. But Moscow also says that an immediate boost to supply for European customers would come as soon as German authorities approve the controversial Nord Stream 2 pipeline.

Putin told Gazprom's CEO, Alexei Miller, last week that as soon as the Russian gas giant completes filling Russia's underground storage by or on November 8, "I would like you to start consistent and planned work on increasing the amount of gas in your underground depots in Europe – in Austria and Germany," per the English translation on the Kremlin website.

Putin's apparent promises of more supply sank natural gas prices at the end of last week.

Early this week, however, natural gas prices at the key European and UK hubs surged again on Monday, after gas flows on the Yamal-Europe pipeline from Russia reversed the direction eastward instead of westward through Germany. 

By Tsvetana Paraskova for Oilprice.com

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