Thursday, November 30, 2023
HomeGasGermany Freezes Nord Stream 2 Gas Project

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Germany Freezes Nord Stream 2 Gas Project

Germany on Tuesday halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognized two breakaway regions in eastern Ukraine.

Europe’s most divisive energy project, worth $11 billion, was finished in September, but has stood idle pending certification by Germany and the European Union.

The pipeline had been set to ease the pressure on European consumers facing record energy prices amid a wider post-pandemic cost of living crisis, and on governments that have already forked out billions to try to cushion the impact on consumers.

But on Tuesday the European benchmark gas price, currently the Dutch March contract, was up 9.8% at 78.95 euros per megawatt hour (MWh) at 1607 GMT, much like the price for the fourth quarter, when Nord Stream 2 had been expected to start.

Dmitry Medvedev, Russia’s former president and now deputy chairman of its Security Council, tried to rub salt in that wound.

“Welcome to the new world where Europeans will soon have to pay 2,000 euros per thousand cubic meters!” he tweeted – suggesting prices were set to double.

President Vladimir Putin did pledge, however, that Russia would not interrupt any of its existing gas supplies.

The Kremlin hoped the delay of Nord Stream 2 would be temporary, Interfax news agency reported, citing Kremlin spokesperson Dmitry Peskov.

Germany gets half its gas from Russia and had argued that Nord Stream 2 was primarily a commercial project to diversify energy supplies for Europe.

But despite the potential benefits, the pipeline had faced opposition within the European Union and from the United States on the grounds that it would increase Europe’s energy dependence on Russia as well as denying transit fees to Ukraine, host to another Russian gas pipeline, and making it more vulnerable to Russian invasion.

“This is a huge change for German foreign policy with massive implications for energy security and Berlin’s broader position towards Moscow,” said Marcel Dirsus, non-resident fellow at Kiel University’s Institute for Security Policy.

“It suggests that Germany is actually serious about imposing tough costs on Russia.”

‘TRUE LEADERSHIP’

Washington welcomed Scholz’s announcement, saying it had been in close consultation with the German government overnight.

Ukrainian Foreign Minister Dmytro Kuleba tweeted his approval.

“This is a morally, politically and practically correct step in the current circumstances,” he said. “True leadership means tough decisions in difficult times. Germany’s move proves just that.”

German Chancellor Olaf Scholz said he had asked the economy ministry to make sure certification could not take place now.

“The appropriate departments … will make a new assessment of the security of our supply in light of what has changed in last few days,” he said.

Economy Minister Robert Habeck said Germany’s gas supply was secured even without Nord Stream 2. But he told journalists in Duesseldorf that prices were indeed likely to rise further in the short term.

The Russian state-owned gas giant Gazprom owns the entire pipeline but paid half the costs, with the rest shared by Shell, Austria’s OMV, France’s Engie and Germany’s Uniper and Wintershall DEA.

OMV said it did not currently see a need for write-downs over Nord Stream 2 and had already started receiving a return on its financing.

The Federal Network Agency – which regulates Germany’s electricity, gas, telecommunications, post and railway sectors – had suspended the certification process in November, saying Nord Stream 2 must register as a legal entity in Germany.

Analysts had expected it to pick up the procedure in mid-year after the operator did as requested.

Source: Reuters

Related Posts

Video

Finance & Economy
Shipping News
Ports

Euronav: Dividend Distribution For Q3 2023 & Business Update

Euronav NV provides a business and dividend update following the recent board and management changes. The Supervisory board has agreed to distribute USD 0.57 per...

A new chapter for Euronav

Euronav shareholders have approved strategic changes at the company ushering in a new era.

TEN Reports Earnings Results for Q3 & 9M2023

Tsakos Energy Navigation Limited reported earnings results for the third quarter and nine months ended September 30, 2023. For the third quarter, the company reported...

StealthGas posts near-record quarterly profit

STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial...

Golar LNG Reports Third Quarter Net Income of $114 Million

Golar LNG announced its interim results for the period ended September 30, 2023. Highlights include: Golar LNG Limited (“Golar” or “the Company”) reports Q3 2023 Net...

Baltic index extends rally on higher capesize rates

The Baltic Exchange’s dry bulk sea freight index rose on Tuesday for the fourth...

CLIA presents cruise industry’s Action Plan for Greeceto the Greek Government

Representatives of Cruise Lines International Association (CLIA), members of the Government, and key stakeholders...

Baltic index scales 1 and 1/2-year peak

The Baltic Exchange’s dry bulk sea freight index rose on Monday for the third...

Greek merchant fleet up in numbers, down in volume

The Greek merchant shipping fleet rose in numbers but fell in volume in September. More...

Celestyal unveils 3 new countries and 6 new ports for 2024 & 2025

Celestyal the award-winning, number one choice for cruise travelers to the Greek islands and...

Port Houston Breaks Export Record

October was the biggest month ever for loaded exports at Port Houston, up 6% compared to last October. Port Houston’s loaded exports are up...

Port of Piraeus working on first shore power connection slots for 2024

The Piraeus Port Authority (PPA), which manages the largest and busiest port in Greece, announced the first five shore power connection slots for ferry...

Two major US cruise operators interested in buying Lavrio port

The tender for the concession of Lavrio port is set to begin in the next few weeks. Sources tell Kathimerini there are at least two...

Biden Administration Invests Over $650 mln in US Ports to Strengthen Supply Chains

The U.S. Department of Transportation’s Maritime Administration (MARAD) announced over $653 million to fund 41 port improvement projects across the nation under the Port...

APM Terminals & DP World spearhead roadmap for accelerating electrification of port operations in bid for net-zero

APM Terminals and DP World announced an initiative to accelerate decarbonisation of the world’s terminals through the widespread electrification of container handling equipment (CHE)....