Germany suspends Nord Stream 2 certification delaying commissioning effectively into 2022

Germany’s Federal Network Agency (BnetzA) suspended its certification of the Nord Stream 2 pure gasoline pipeline from Russia to Germany on November 16 which is able to delay the beginning date into the primary quarter or presumably the second quarter of 2022.

A spokesman for Nord Stream 2 AG advised New Europe on November 16 the German regulator BNetzA has publicly knowledgeable a few non permanent suspension of the certification process because of the basis of a Nord Stream 2 subsidiary firm. “Our company undertakes this step to ensure compliance with applicable rules and regulations. We are not in the position to comment on details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations,” the Nord Stream 2 spokesperson stated.

Chris Weafer, co-founder of Macro-Advisory in Moscow, advised New Europe on November 17 the velocity at which they’ll pursue the evaluate might rely both on the place taken by the brand new German authorities – professional or anti the mission – and the climate. “Utilities say they have enough gas to work through a ‘normal’ winter but not if it is very cold and demand rises. If the latter, then pressure will grow to approve Nord Stream 2 sooner,” Weafer stated.

“The leader of the Greens is opposed to the project, but the dominant political party is in favor, as is most of German industry,” he stated, arguing that “the fact that the work is now fully complete and will be less environmentally damaging than ship borne (liquified natural gas) LNG should also ease the objections to the Green party leadership”.

Katja Yafimava, a senior analysis fellow on the Oxford Institute for Energy Studies, advised New Europe on November 17 BNetzA will finally certify the Nord Stream 2 operator however the resolution to droop certification till a German-registered subsidiary is established suggests there will probably be a delay. She defined that BNetzA is anticipated to re-start the certification course of as soon as the subsidiary is established and to difficulty a draft certification resolution throughout the the rest of the 4-month interval obtainable to it beneath regulation (this era is counted from September Eight as much as the suspension date of November 16, after which from no matter date when the certification course of is restarted), so the unique deadline of January Eight might slip, doubtlessly as much as a few months that will be wanted for establishing the German subsidiary. “Importantly, the German ministry of economy and energy has already concluded that Nord Stream 2 certification will not pose danger to security of supplies, and no new assessment by the ministry is required,” Yafimava stated.

She added that the European Commission will nonetheless have 2 months extendable by additional 2 months for issuing an opinion, and BNetzA would nonetheless have one other 2 months for issuing a last certification resolution. “This suggests that the certification process will only be fully completed by/in summer,” she stated.

Explaining the explanations of the suspension, Yafimava stated it’s not fully clear why BNetzA has accepted a Swiss-registered Nord Stream 2 AG utility for certification within the first place, if it holds the view that solely a German-registered firm may be licensed as an operator. But BNetzA has has accepted it and in addition confirmed that every one the mandatory paperwork had been obtained on 8 September.

“My explanation of this is as follows. Its press release seems to suggests that BNetzA may have expected that Nord Stream 2 AG will change its legal form and re-register as a German company to operate the entire Nord Stream 2 pipeline. But as neither the EU nor the German law extend beyond the German territory, Nord Stream 2 AG appears to have rejected this variant and decided to establish a new German-registered subsidiary to own and operate the German section of Nord Stream 2 only. This would be strictly in line with the amended gas directive, whose requirements on unbundling, TPA, tariffs, do not extend beyond the German section,” Yafimava defined.

BnetzA’s motion to droop its certification of Nord Stream 2 comes towards the backdrop of tensions between Russia and Europe over Belarus and Ukraine.

On November 15, BNetzA formally accepted Ukraine’s National Joint Stock Company Naftogaz’s utility to be included within the certification technique of Nord Stream 2 AG.

Weafer stated the timing is undoubtedly political. “To approve the project, and then send it to the EU for sign off, against such a charged political backdrop, would risk a dangerous backlash,” he stated. “Much more sensible to wait until the current controversies in Belarus, on the Ukraine border and in Space, to either ease or, hopefully, be resolved and then to approve the project. If, in the meantime, there is a very cold winter and prices again spike, which would remind industry and consumers why they need the extra pipeline, then so much the better from the viewpoint ot Nord Stream,” Weafer argued.

For her half, Yafimava stated the BNetzA’s resolution to droop certification doesn’t have something to do with the scenario in Belarus. “If anything, uncertainty over reliability of transit via Belarus and a potential loss of Yamal’s transit capacity should have made Germany wary of further delaying the start of supplies via Nord Stream 2. I also don’t think the BNetzA’s decision has anything to do with its acceptance of Naftogaz and GTSOU (Transmission System Operator of Ukraine) in the certification process. BNetzA has accepted them, just as it has accepted (Polish oil and gas company) PGNiG earlier, so that in the event of any future legal action they would not be able to allege that their views have not been taken into account – and they don’t have a veto right anyway,” she stated.

Yafimava identified that by accepting the Swiss-registered Nord Stream 2 AG utility, BNetzA has successfully created for itself an choice of with the ability to droop the certification course of at any time of its personal comfort on the primarily procedural grounds. She argued that it can’t be fully dominated out that the timing of BNetzA’s suspension resolution is perhaps political, each domestically because of the formation of the brand new German authorities and internationally as a result of tensions between the EU and Russia and a risk of US sanctions.

Unless BNetzA permits Nord Stream 2 to movement gasoline whereas certification is pending, there will probably be no extra Russian gasoline despatched to Europe past what Russian gasoline monopoly Gazprom can ship by utilizing its booked or obtainable for reserving agency capability on the present export corridors, together with Nord Stream 2, Yamal, Ukraine, Turkish Stream, thus suggesting the entire winter of excessive gasoline costs, Yafimava stated, including, “But it still remains a valid proposition that if the winter is very cold and storages are very low BNetzA may allow flows via Nord Stream 2 while certification is pending”.

comply with on twitter @energyinsider

Source

Leave a Reply

Your email address will not be published.

Back to top button

Adblocker detected! Please consider reading this notice.

We've detected that you are using AdBlock Plus or some other adblocking software which is preventing the page from fully loading. We don't have any banner, Flash, animation, obnoxious sound, or popup ad. We do not implement these annoying types of ads! We need money to operate the site, and almost all of it comes from our online advertising. Please add www.postofasia.com to your ad blocking whitelist or disable your adblocking software.