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Completed pipeline in the gas crisis: what's next for Nord Stream 2?

2021-10-21T06:29:41.453Z


The pipes are under the Baltic Sea, gas is in, now someone just needs to turn the tap on - the Nord Stream 2 pipeline could alleviate Europe's acute gas crisis. The billion-dollar project is still facing months of drama.


Enlarge image

Ready to go

:

Slavyanskaya compression station at the beginning of the Nord Stream 2 gas pipeline near the Russian Baltic city of Ust-Luga

Photo: Peter Kovalev / imago images / ITAR-TASS

The ball is in the other's field.

This is the saying goes when someone has done a job and is waiting for a response.

But Russia's EU ambassador Vladimir Tschichow pointed a little further at a press conference on Tuesday: He assumed "that this ball is

in the gate of

the German regulatory authority".

Hit for Russia?

The pipes of the Nord Stream 2 gas pipeline have been welded since September.

The system is technically approved.

The first of two 1230-kilometer strings that connect Russia and Germany under the Baltic Sea has been filled with natural gas since Monday - gas that the market is currently thirsting for, in the midst of an unprecedented supply crisis with huge price jumps and far-reaching consequences.

What is missing at the start?

The Federal Network Agency in Bonn has yet to approve the operating company Nord Stream 2 AG, based in Zug, Switzerland, to be considered an independent network operator. "Unbundling" of production, transport and sales has been mandatory in the EU gas market since 2019. Above all, the directive is intended to break the market power of the majority state-owned Russian gas company Gazprom, which supplies the gas and owns 100 percent of Nord Stream 2 shares - since last year it has been outsourced to an international holding company. With separate accounting, the Swiss company could meet the directive. Is that enough? In the worst case scenario for Gazprom, Bonn could also prescribe a sale of the pipeline.

The authority has until January 8, 2022 for its opinion, and the Federal Ministry of Economics is also involved.

The EU Commission, whose President

Ursula von der Leyen

(63) currently identifies Russia as the culprit for the gas crisis, can then comment within two months.

The Federal Network Agency would then have another two months deadline for the final approval.

So it won't be winter anymore?

Gazprom could just turn the tap on and create facts, but shies away from confrontation. Nevertheless, the Russians declare a start this year as their goal. The gas shortage in Europe could help them, after all, the fuel is needed for heating, especially in winter, and the governments will not want their citizens to expect many times higher energy prices. Greens boss Annalena Baerbock, who rejects Nord Stream 2, therefore complains to the newspapers of the Funke group about a "poker game". Germany must not allow itself to be "blackmailed" and must refuse permission.

However, this reputation is likely to fade.

SPD chancellor candidate Olaf Scholz speaks of "very formal processes", so he does not want a political veto.

In their explorations, the traffic light partners only agreed on a general commitment to EU law.

A provisional, limited-term approval of the tube by the Federal Network Agency is realistic, explains Katja Yafimava from the Oxford Institute for Energy Studies.

A fast-track procedure with final approval by Bonn, Berlin and Brussels is also possible, but unlikely.

How political is the process?

There can be no question of a purely formality - if only because of the different interests within the EU, in which states such as the gas transit country Poland see themselves as victims of a deal between Russia and Germany and, for once, find many advocates in the West. Within Germany, views on Nord Stream 2 also differ widely. The SPD election winner in Mecklenburg-Western Pomerania,

Manuela Schwesig

(47),

is particularly exposed

, for whose country the Nord Stream Terminal there is an important economic factor and who therefore almost would have been placed under US sanctions.

To avert this, the federal government negotiated an agreement in July that also protects Ukraine as a traditional transit country for Russian gas.

Gazprom is guaranteeing the Ukrainian colleagues from Naftohas the revenue from fees until at least 2024, which could also be lost as a result of the Nord Stream opening.

The federal government is likely to require that Ukraine continue to earn money as a middleman.

Naftohas has also registered to participate in the Bonn approval process.

Does Gazprom keep the gas tight on purpose?

Gazprom recently reported that it had increased its gas exports to Germany by a third over the year to date. In October, however, it looks different. At the beginning of the month, bookings in the old overland pipelines fell suddenly. Via Ukraine, Gazprom only manages the minimum that is paid anyway. Auctions for the capacities of the traditional main Yamal-Europe pipeline through Belarus and Poland even remained without bidders. All these reports made the already multiplied stock exchange prices soar even further. In the short term, Gazprom actually seems to be reducing its supply, and in this situation of all places.

On the other hand, both the Russian group and its major western customers affirm that all contracts will be fulfilled.

EU Commission President von der Leyen is now basing her suspicions on the fact that Gazprom would have to pour even more gas onto the market.

To forego lucrative business at current prices is irrational.

Nevertheless, the Oxford Institute sees a plausible explanation for this: priority is given to filling the gas storage facilities in Russia itself, which will be targeted by November 1st.

If a hard, early Russian winter does not set in, more capacity should be available for gas exports to the west - especially if Nord Stream 2 is opened.

What role do western corporations play?

Gazprom operates Nord Stream 2 only on a pro forma basis.

Five western energy companies operate as "financial investors" and together have assumed half of the construction costs.

These were stated at 9.5 billion euros in 2018 and have not been adjusted since then, although US sanctions forced the project into expensive delays and the search for new partners.

Each of the five should have invested a good billion amount in the Baltic Sea pipeline, which would probably be lost without gas deliveries:

  • Wintershall Dea, the only German oil and gas multinational that is majority owned by the chemical company BASF, with the company Letter One owned by Russian billionaire Michail Fridman as a minority shareholder;

    As the number one industrial consumer, BASF is dependent on Russian natural gas, including for the Group's own industrial power plants

  • the power plant operator and energy trader Uniper, which was split off from Eon and is now three-quarters owned by the Finnish state company Fortum, also with strong interests in Russia;

    Uniper inherited what was left of the old Ruhrgas, with which the gas business with what was then the Soviet Union began in the 1970s

  • the Austrian oil and gas group OMV, in which the Republic of Austria holds a blocking minority and operates the central node of the gas network in Central Europe

  • just as the French state has a stake in the energy giant Engie, which tends to play a leading role in the global liquefied natural gas (LNG) business and provides additional protection in the pipeline business

  • and the Dutch-British oil and gas multinational Shell has also joined the consortium with the same motivation

The participation runs through loans to the Swiss operating company - in contrast to the predecessor project Nord Stream, which opened in 2011 and is also based in Switzerland.

The western Gazprom partners, with a slightly different composition (Eon and Gasunie instead of Uniper and Shell), are also officially shareholders, with former Chancellor

Gerhard Schröder

(77, SPD) leading their committee.

How does the project fit in with the climate goals?

Not at all if you ask the Greens or related organizations. Natural gas is a fossil fuel, albeit with a comparatively low CO2 content (only about 0.1 percent from Russian production). According to the model of a climate-neutral Germany, no more natural gas should be burned or blown into the air by the middle of the century. Opening up new gas infrastructure now seems to counteract that.

However, the current gas crisis also shows how far away a reliable supply from renewable energies alone is - even in electricity production, where the energy transition is most advanced, the contribution of wind and sun still falls below half under unfavorable weather conditions.

It will be decades before storage and networks are sufficient.

As long as this is the case, a lower consumption of natural gas, as is currently the case because of the high prices, usually means that more oil and, above all, coal will be used instead.

The result: CO2 emissions, which are harmful to the climate, are increasing.

ak

Source: spiegel

All news articles on 2021-10-21

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