Germany’s energy watchdog Bundesnetzagentur has suspended the approval process for the contentious Nord Stream 2 natural gas pipeline. The regulator on Tuesday said that under German law, the Swiss-based consortium behind the project needed to set up a German subsidiary to get an operating licence. European gas prices spiked 11% following the news, with the Dutch front-month contract exceeding €90 ($102) per MWh in afternoon trade.
Analysts said the time to establish a new subsidiary would push back the project timeline significantly. They said it would be unlikely for Nord Stream 2 to start pumping gas from Russia to Germany by the first quarter of 2022. The project has faced opposition from the US and some European states, which say it will reinforce Russian influence over Europe. However, other European governments say the pipeline is crucial to secure energy supplies, especially after regional gas prices hit a record high earlier this year.
