The Bundnesnetzagentur Suspends Nord Stream 2 Certification in Germany

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The Bundnesnetzagentur Suspends Nord Stream 2 Certification in Germany

Tue, 11/16/2021 - 14:26
Sigil of the Bundesnetzagentur (© Shutterstock/Tobias Arhelger)
Sigil of the Bundesnetzagentur (© Shutterstock/Tobias Arhelger)

In a sobering official announcement with profound implications for the eventual operation of the Nord Stream 2 gas pipeline, the Bundnesnetzagentur (Federal Network Agency), the overseer of pipeline operations in Germany, has temporarily suspended the present certification process for the pipeline on the basis of formal legal reasons.

First the operating company of the pipeline must be organized according to German law.  Without the completion of this step the Bundnesnetzagentur cannot certify the operation of Nord Stream 2 for gas deliveries in the German domestic market.

With regard to EU Gas Guidelines the operation of the pipeline and the sales of the gas product have to be separated.  In other words the same entity cannot do both.  According to the Bundesnetzagentur the Nord Stream 2 AG, registered and based in Switzerland and owned by Gazprom, has decided to found a subsidiary based on German law solely for the operation of the German part of Nord Stream 2.  This subsidiary will become the owner of this section of the pipeline.  The deadline for the Agency's work expires in January 2022.

Even assuming the Bundnesnetzagentur approves of the foregoing process, the European Commission intends to conduct its own investigation which could last up to four months.  Thereafter the Bundnesnetzagentur has another two months for the final certification.

The news development caused tremors in the European gas market, causing prices to jump 10% more than in the previous day.

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