Certification of controversial Russian gas pipeline suspended by Germany

BERLIN – The German network regulator announced on Tuesday that it had suspended its process of certifying the operator of a new pipeline that will bring Russian gas to the country under the Baltic Sea over an issue with the company’s status under German law.

Construction of the Nord Stream 2 pipeline was completed earlier this year but is not yet operational. It is a controversial project that Ukraine and the United States are opposing.

Last month, Russian President Vladimir Putin said the country could quickly increase gas supplies to the European Union as soon as German regulators allow the new pipeline to go into operation. Energy prices in Europe, which imports much of its natural gas from Russia, have skyrocketed and troubled businesses and households.

To what extent the suspension of the procedure for the certification of Nord Stream 2 AG as an independent transmission system operator by the Federal Network Agency could delay these plans was initially not clear. The step is required before gas can legally flow.

“After a detailed examination of the documents, the Federal Network Agency came to the conclusion that the certification of an operator of the Nord Stream 2 pipeline is only possible if this operator is organized in a legal form under German law,” says a message from the regulatory authority .

The operating company, based in Zug, Switzerland, “decided not to convert its existing legal form, but to found a subsidiary under German law that exclusively regulates the German part of the pipeline,” it continues. This will become the owner and operator of the German section of the pipeline.

The agency said certification will remain on hold “until key assets and staff have been transferred to the subsidiary” and it can verify that documentation is complete.

Owned by Russian-controlled gas giant Gazprom with investments from several European companies, Nord Stream 2 has been built under the Baltic Sea, bypassing Poland and Ukraine, raising objections from those countries.

The US has spoken out strongly against the construction of Nord Stream 2, but reached an agreement with Germany in July to enable the completion of the pipeline without imposing US sanctions on German companies.

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