November 17, 2021 20:47 PM
European natural gas prices jumped due to the news.
[Reuters Frankfurt]The German energy regulator has suspended the approval process for the Beixi No. 2 natural gas pipeline, putting this controversial project facing new obstacles and pushing up natural gas prices in Europe.
The German Federal Internet Agency (Bundesnetzagentur) said on Tuesday that it has temporarily suspended the certification process because according to German law, the Swiss consortium controlling Beixi 2 first needs to set up a German subsidiary to secure an operating license.
European natural gas prices jumped due to the news, and the Dutch natural gas contract soared 15% on Tuesday to close at 94 euros/MWh.
“This really pushed back the expected timeline a lot,” said Trevor Sikorski, an analyst at Energy Aspects. It is unclear how long the process of establishing a new company and reapplying for certification will take.
He said that the start of Beixi 2 gas transmission in the first half of 2022 seems hopeless.
Beixi 2 faces strong opposition from the United States and some European countries, who say it will make Europe too dependent on Russian natural gas. But other European governments have stated that this pipeline is essential to ensure energy supply. Natural gas prices have soared in recent weeks, and Europe is facing the threat of power outages this winter.
The builder of the Beixi No. 2 pipeline stated that it had received a notification from the regulatory agency on the certification decision, but could not comment on the details of the procedure, its possible duration, and its impact on the pipeline’s start-up time.
“Any delay in pipeline certification, especially in the winter months, is not in the interest of the European Union. There is no doubt that,” Konstantin Kosachyov, deputy chairman of the Russian House of Lords, told TASS.
The German Federal Internet Agency stated that the application will only be reviewed after the main assets and personnel budget are transferred to the German subsidiary.
“Only after the operator is established in a form that complies with German law, will the Beixi No. 2 pipeline be considered for operation certification,” it said.
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