UK Gas Prices Jump 10% After Germany Suspends Nord Stream 2 Certification

Natural gas futures surged in Europe after Germany’s energy regulator temporarily suspended certification of the Nord Stream 2 pipeline. The move followed the Swiss-based project creating a German subsidiary to own and operate the German section of the pipeline.

The Bundesnetzagentur said Nord Stream 2, which was set to begin operations this year, failed to organize an operator recognized under German law, sending gas prices higher.

“The subsidiary itself must meet the requirements of the Energy Industry Act for an independent transport network operator,” the regulator said in a statement.

“The certification process remains suspended until the transfer of the essential assets and human resources to the subsidiary has been completed.

“The Federal Network Agency will be able to check the newly submitted document of the subsidiary as the new applicant for completeness.”

Bundesnetzagentur Statement

Nord Stream 2 is forecasted to pump 55 billion cubic metres of gas under the Baltic Sea from Russia to Germany, and elsewhere in Europe. The pipeline would allow Gazprom to reach customers on the EU bloc and bypass pipelines through Ukraine and could potentially meet one third of Europe’s gas needs, according to Gazprom.

The hold up saw UK gas contracts for delivery in December jump 10% to £2.24 a therm, while the European benchmark rose 8% to €87.80 per megawatt hour with the threat of even further tight supplies.

Source: Reuters

From The TradersCommunity News Desk