Russia’s contentious Nord Stream 2 gas pipeline Is Dead for Now

Russia’s controversial Nord Stream 2 gas pipeline is all but dead. At least for now.

Russia’s controversial Nord Stream 2 gas pipeline is all but dead. At least for now.

German Chancellor Olaf Scholz effectively froze the US$11-billion link’s approval process by having the Economic Ministry withdraw its assessment that the project doesn’t pose a threat to security of supply. Without that, the operator of the pipeline connecting Russia to Germany bypassing Ukraine cannot obtain the certification needed to start operations.

Germany has long argued the pipeline is a commercial project, but it changed course after President Vladimir Putin announced he’s recognizing two self-proclaimed separatist republics in eastern Ukraine. He also signed an order to send what he called “peacekeeping forces” to the two breakaway areas, a dramatic escalation in Russia’s standoff with the West over Ukraine.

“The situation today is a fundamentally different one,” Scholz told reporters in Berlin on Tuesday. “So we have to reassess the situation given the latest developments, also regarding Nord Stream 2.”

Nord Stream 2 has divided European countries, with eastern nations voicing concerns it would give Russia even more political leverage over the region and starve Ukraine of gas-transit revenues. Russia is Europe’s top gas supplier, with typically about a third of flows traveling through Ukrainian pipelines.

The pipeline, which took a decade to build and faced several delays due to U.S. sanctions, is currently built and filled with gas, just awaiting certification process to start. The approval process was first halted at the end of last year as the German energy regulator asked the pipeline operator, a Swiss company, to set up an entity in the country to comply with European Union regulations.