Germany suspends Nord Stream 2 certification process, delaying operations

Germany’s Federal Network Agency (BNetzA) has suspended certification of the 55-billion cu m/year Nord Stream 2 gas pipeline, saying that Nord Stream 2 AG does not meet the criteria to be an independent transmission system operator, specifically that it must be organized in a legal form under German law. As a result of this action and other regulator delays, Rystad Energy now projects that the pipeline will not begin commercial operations until mid-2022.

“The BnetzA decision confirms the effectiveness of the PGNiG Group’s legal efforts. The German regulator agreed with our position that Nord Stream 2 AG, as a company under Swiss law, cannot serve as a transmission system operator,” commented Paweł Majewski, president of the management board of PGNiG SA.

The certification procedure for Nord Stream 2 will be suspended until the organizational transformation of the applicant is completed. Upon completion and submission of new documentation, the BNetzA will resume examination on whether the criteria set out in the law for certification of a gas pipeline operator have been met.

“In our opinion, from a legal perspective it is not possible to certify a subsidiary of Nord Stream 2 AG as an independent pipeline operator. Nor is it possible to establish an operator that applies European Union (EU) law solely within the territorial waters of the Federal Republic of Germany. We perceive today’s decision as the first step towards ensuring enforcement of the European Union law in relation to the Nord Stream 2 project. In the subsequent stages of the proceedings, we will aim to ensure that the regulatory authorities take into account the principle of energy solidarity and the requirements of the EU law,” said Majewski.

BNetzA also agreed to allow Ukraine to participate in the Nord Stream 2’s certification. Ukraine’s state energy company shares PGNiG’s view that Nord Stream 2 should not be allowed to begin operations without first being in compliance with EU energy law.

Nord Stream 2 completed work on the pipeline and first-string gas fill earlier this year but is awaiting certification to begin operations (OGJ Online, Oct 18, 2021). The two-string pipeline will deliver Russian gas to Germany via the Baltic Sea bed.