A German regulator on Tuesday suspended its certification of Nord Stream 2, an undersea pipeline intended to transport natural gas directly to Germany from Russia that has been the source of a long-running dispute between Berlin, Washington and Brussels.
The action means that the recently completed pipeline will not begin supplying gas to Germany anytime soon, and comes against the backdrop of a politically charged jump in energy prices in Europe and tensions between Moscow and Europe over Belarus and Ukraine.
The news caused a jump in European natural gas markets, with the price of U.K. natural gas futures soaring more than 9 percent on Tuesday.
It also comes as Germany finds itself in political limbo, with Chancellor Angela Merkel, a firm supporter of the pipeline project, reduced to a caretaker role while leaders from the Social Democratic, Green and Free Democratic parties debate the makeup of a new government, one that has the potential to be less favorable to its predecessor’s pet energy project.
In its ruling, Germany’s Federal Network Agency, which oversees the country’s essential infrastructure,said that the decision of the Swiss company that owns the pipeline to set up a subsidiary in Germany meant that more paperwork was required. Once the subsidiary has met the necessary bureaucratic requirements, an evaluation can begin anew.
The German agency does not have the final say in the project, which also requires approval from the European Commission that can only be taken up once the German agency has signed off — meaning Europe could be well into spring before any gas would be flowing.
That is if the political tensions do not get in the way.
President Vladimir V. Putin of Russia has pushed for the German regulators to approve the pipeline as a way of easing Europe’s natural gas crisis, telling an energy conference in October that Moscow would “expand supplies” along the 750-mile pipeline once it received regulatory approval. Many in Europe suspect the Russian leader has deliberately held back natural gas to create pressure to approve the new pipeline.
But when Aleksandr G. Lukashenko, the leader of Belarus, threatened to cut off supplies of Russian natural gas that flow through his country to Europe — a retaliation for recent European Union sanctions over fraud in claiming a sweeping re-election victory in August and for harsh suppression of dissent — Mr. Putin chastised him, telling Europeans that he had spoken in anger.
The United States opposed Nord Stream 2 for years, but in July, the Biden administration waived a threat to impose sanctions to block the project after concluding that the pipeline could not be stopped without a counterproductive fight with Germany.
Poland and other Eastern European countries have also argued against Nord Stream 2, fearing the additional reliance on Russia. Ukraine has argued that the pipeline could cost it $2 billion in annual transit revenue it earns from a pipeline from Russia that runs through its territory, and makes it more susceptible to energy extortion by Russia.
Mandy Rose Parker – Follow @MandyRoseParker