Germany blocks Nord Stream 2 gas project as Ukraine crisis deepens

BERLIN, Feb 22 (Reuters) – Germany on Tuesday halted the Nord Stream 2 Baltic Sea fuel pipeline mission, designed to double the circulation of Russian fuel direct to Germany, after Russia formally recognised two breakaway areas in japanese Ukraine.

Europe’s most divisive power mission, value $11 billion, was completed in September, however has stood idle pending certification by Germany and the European Union.

The pipeline had been set to ease the stress on European shoppers going through file power costs amid a wider post-pandemic value of dwelling disaster, and on governments which have already forked out billions to attempt to cushion the impression on shoppers.

However on Tuesday the European benchmark fuel worth, at the moment the Dutch March contract , was up 9.2% to 78.50 euros per megawatt hour (MWh) at 1337 GMT.

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

“Welcome to the brand new world the place Europeans can pay 2,000 euros for fuel!” he mentioned, in line with the information company RIA.

Germany obtains half its fuel from Russia and had argued that Nord Stream 2 was primarily a business mission to diversify power provides for Europe.

However regardless of the potential advantages, it had confronted opposition throughout the European Union and from the US on the grounds that it might improve Europe’s power dependence on Russia in addition to denying transit charges to Ukraine, host to a different Russian fuel pipeline, and making it extra susceptible to Russian invasion.

“This an enormous change for German overseas coverage with large implications for power safety and Berlin’s broader place in direction of Moscow,” mentioned Marcel Dirsus, non-resident fellow at Kiel College’s Institute for Safety Coverage.

“It means that Germany is definitely critical about imposing robust prices on Russia.”

‘TRUE LEADERSHIP’

Ukrainian Overseas Minister Dmytro Kuleba tweeted his approval.

“It is a morally, politically and virtually appropriate step within the present circumstances,” he mentioned. “True management means robust selections in troublesome instances. Germany’s transfer proves simply that.”

Chancellor Olaf Scholz mentioned he had requested the financial system ministry to ensure certification couldn’t happen in the mean time.

“The suitable departments … will make a brand new evaluation of the safety of our provide in mild of what has modified in previous few days,” he mentioned.

Financial system Minister Robert Habeck mentioned Germany’s fuel provide was secured even with out Nord Stream 2.

However he informed journalists in Duesseldorf that fuel costs had been certainly more likely to rise additional within the brief time period.

The Russian state-owned fuel big Gazprom owns half the pipeline, and the remaining is cut up between Shell (SHEL.L), Austria’s OMV(OMVV.VI), France’s Engie , Germany’s Uniper (UN01.DE) and Wintershall DEA (RWEDE.UL).

The Federal Community Company – which regulates Germany’s electrical energy, fuel, telecommunications, put up and railway sectors – suspended the certification course of in November, saying Nord Stream 2 should register a authorized entity in Germany.

Analysts had anticipated it to select up the process in mid-year after the operator did as requested.

However the regulator mentioned on Tuesday that the required constructive evaluation by the financial system ministry was not out there. The Nord Stream 2 working firm mentioned it was ready to be correctly notified of the halt.

Reporting by Sarah Marsh and Madeline Chambers; Extra Reporting by Joseph Nasr, Andreas Rinke, Christoph Steitz and Reuters TV in Germany and Susanna Twidale in London; Enhancing by Kevin Liffey

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