German authorities announced today that they have suspended the licensing procedure for the company that manages the new Nord Stream 2 gas pipeline due to problems with its legal status.
The construction of the gas pipeline through which Russian gas will arrive in Germany was completed this year, but it is not yet in function.
Russian President Vladimir Putin said last month that Moscow could quickly increase natural gas supplies to the European Union as soon as German regulators approve the start of the new pipeline.
Licensing Severni tok 2 AG is necessary for gas to flow legally.
It is currently not clear how the start of the pipeline will be affected by the decision of the German regulatory agency Bundesnecagentur to suspend the licensing procedure for the operator Severni tok 2 AG.
After a thorough review of the documentation, the Bundesnecagentur concluded that granting a license to that company “would only be possible if it had a legal form in accordance with German law”.
The company, based in the Swiss town of Zug, “decided not to change its legal form, but instead to establish a daughter company that would manage exclusively the German part of the gas pipeline,” states the Bundesnecagentur.
The agency added that the process of granting the license will remain suspended “until the main assets and human resources are transferred to the daughter company” and until it can confirm that the documentation has been completed.
The gas pipeline, owned by the Russian giant Gazprom, goes through the Baltic Sea and bypasses Poland and Ukraine, which is why the two countries strongly oppose it.
The United States also strongly opposed the construction of the Nord Stream 2 gas pipeline, but reached an agreement with Berlin in July not to impose sanctions on the German entities participating in the project.
Energy prices have jumped in recent months in Europe, which imports most of its natural gas from Russia, creating difficulties for both companies and households.