US forces Berlin to block Ready-to-Go Nord Stream 2: shoots up Euro gas prices

14 Dec, 2021 10:35 Get short URL

Berlin’s block of Nord Stream 2 takes toll on European gas prices

© Getty Images / Mike Harrington.

The price of natural gas in Europe on Tuesday rose to $1,400 per 1,000 cubic meters after Germany said Russia’s Nord Stream 2 pipeline could not be greenlighted for launch, citing rising tensions on the Ukrainian border.

READ MORE: Germany risks ‘complete loss of credibility’ – former top diplomat

The price of January futures on the TTF hub in the Netherlands rose 5.5% to $1,428 per 1,000 cubic meters at 7:04am GMT, or $138 per megawatt-hour in household terms, according to data from the Intercontinental Exchange.

A day earlier, gas prices in Europe jumped around 10% after German Foreign Minister Annalena Baerbock said Russia’s newly constructed Nord Stream 2 pipeline could not be put in operation because it did not meet the requirements of EU energy law. Berlin suspended the pipeline’s certification process last month because its ownership structure failed to comply with the EU’s gas directive, which forbids the same company from supplying and selling energy within the bloc. READ MORE: What’s next if Belarus delivers on threat to cut off gas transit to EU?

Baerbock, however, noted that the escalation of tensions on the Russian-Ukrainian border was “also a factor” in delaying the pipeline’s launch. This is due to Berlin’s agreement with Washington that Russia cannot use Nord Stream 2 as a political weapon in its relationship with Ukraine.

The energy crisis on the continent deepened further after Belarus renewed its threats to cut off European gas supplies from Russia via the country’s pipeline network if more EU sanctions were imposed over the ongoing migrant crisis on Belarus’ western border.

On Sunday, American Secretary of State Antony Blinken told reporters that the US would do what it could to obstruct Nord Stream 2’s operation “if Russia has renewed its aggression on Ukraine.”

The pipeline was fully completed in September, but has not yet begun operation because of difficulties in getting officially certified. In November, German regulators announced that Nord Stream 2’s operator, based in Switzerland, would need to register as a German company before the certification process could continue.

Russian energy company Gazprom has said that gas is ready to flow as soon as the project is given the green light.

In an interview published on Tuesday in the German newspaper Die Welt, Nehammer, who was elected Austrian chancellor earlier this month, was asked if the Austrian government will continue to support Nord Stream 2. He replied, “Of course,” adding that he expects the pipeline to begin operating soon.

“I don’t consider it necessary to connect Nord Stream 2 with Russia’s behavior in Ukraine,” he went on, referencing a recent political standoff between Moscow and Kiev. “The EU can only hurt itself by doing so. Nord Stream 2 doesn’t only serve Russia’s interests – Germany, Austria, and other EU countries will profit from it. Nord Stream 2 is a European project, which shouldn’t be used as a tool to pressure Moscow.”

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