Germany’s utility regulator has suspended the certification process for the Russian-backed Nord Stream 2 natural gas pipeline, sending already-high European gas prices even further upward.
The regulator announced the suspension Tuesday, saying the pipeline’s owners had not properly set up a subsidiary organization under German law.
The pipeline’s Swiss-based operator “has decided not to transform its existing legal form but instead to found a subsidiary under German law solely to govern the German part of the pipeline,” regulator Bundesnetzagentur said.
“This subsidiary is to become the owner and operator of the German part of the pipeline. The subsidiary must then fulfill the requirements of an independent transmission operator as set out in the German Energy Industry Act,” it added.
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The Bundesnetzagentur said the certification process “will remain suspended until the main assets and human resources have been transferred to the subsidiary.”
European gas futures increased 10% following the news, threatening to compound costs for ratepayers on the continent, where contracts have already hit a record high this year.
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Officials in Russia, which provides a significant share of Europe’s natural gas, have sought to use that position as leverage during the certification process. The Russian ambassador to the European Union, Vladimir Chizhov, said in October that the bloc would be in a better position to remedy price hikes were it more amicable to Russia.
