Nord Stream 2 gas link operator to meet 'all' legislative requirements: Kremlin

The operator of the Nord Stream 2 gas pipeline is ready to meet all legislative requirements ahead of its launch, the Kremlin said Nov. 17, after the German regulator suspended the procedure to certify it as a gas transmission operator.

The Bundesnetzagentur said Nov. 16 that the process would be halted until Nord Stream 2 AG had completed the transfer of assets to a new subsidiary, which would then re-apply for certification, bringing new uncertainty over when the controversial gas pipeline will begin operations.

The suspension of the process helped push European spot prices significantly higher Nov. 16, with S&P Global Platts assessing the TTF day-ahead contract at Eur93.60/MWh ($31.12/MMBtu), up by almost 18% on the day.

Kremlin spokesman Dmitry Peskov said the German regulator's decision was not politically motivated.

"In this case, there really are certain protocols, there are certain norms of European legislation in this regard," Peksov was quoted as saying by the Prime news agency.

"The operator company is ready to fulfill all the requirements of the current legislation in order to launch this important project for everyone as soon as possible," Peskov said.

"A new subsidiary will be created in order to fulfill the requirements," he said.

Peskov added that he had no clarity on when the process could be completed to allow first gas to flow.

"It is a decision of the regulator, we cannot interfere in this. It was clear from the very beginning that we need to be patient. Here in Russia, we are convinced that the project is important for Europe," he said.

German law

The Bundesnetzagentur said in its decision that it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organized in a legal form under German law.

Gazprom-owned Nord Stream 2 AG is based in Zug, Switzerland.

A spokesperson for Nord Stream 2 AG said the new subsidiary company would enable it to "ensure compliance with applicable rules and regulations."

The regulator said the new subsidiary would become the owner and operator of the German part of the pipeline. "The subsidiary must then fulfill the requirements of an independent transmission operator as set out in the German Energy Industry Act."

Nord Stream 2 AG applied in June for approval as an independent gas transmission network operator, but the Bundesnetzagentur only deemed the application as complete in early September.

The regulator has up to four months from Sept. 8 to produce a draft decision on certification, meaning a first decision might not be published before January.

The Bundesnetzagentur said Nov. 16 that once the new requirements had been fulfilled by Nord Stream 2 AG and the new application by its subsidiary is complete, it would be able to "resume its examination in the remainder of the four-month period set out in law, produce a draft decision and deliver it to the European Commission for an opinion, as provided for in the EU legislation on the internal market".

Russia has said that Nord Stream 2 is ready to begin commercial operations pending regulatory approval and that flows through the pipeline would help ease European gas prices which remain at sustained highs on winter supply concerns.