Gas prices soar after setback for Russian pipeline approval

UK and EU wholesale gas prices have risen by 17% after Germany’s energy regulator suspended approval of the controversial Nord Stream 2 natural gas pipeline from Russia to Germany.

 

It said the pipeline’s operating company needed to be compliant with German law before it would certify the €10bn (£8.4bn) project.

 

Critics fear the pipeline will increase Europe’s energy dependence on Russia.

 

The pipeline was finished in September, but it had been beset by delays.

 

Running under the Baltic Sea, Nord Stream 2 will double Moscow’s gas exports to Germany, but it will also circumvent Ukraine, which relies on existing pipelines for income and would be hard-hit by the loss of transit fees.

 

German businesses have invested heavily in the 1,225km (760-mile) pipeline and former Chancellor Gerhard Schröder has played a big role in its development.

 

Gas prices were already high before this latest setback for the project. A cold winter in Europe last year put further pressure on supplies and, as a result, stored gas levels are much lower than normal.

 

The German regulator said “it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law”.

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