Germany energy regulator has suspended approval for Russia's Nord Stream 2 pipeline hours after Boris Johnson told the EU it must choose between Ukraine's freedom or buying gas from Moscow.
Construction of the pipeline, which will carry Russian gas directly across the Baltic to Germany, was delayed by United States sanctions and is strongly opposed by many European countries who believe it is designed to freeze Ukraine out of transit fees for shipping Russian gas.
German regulator, Bundesnetzagentur, said on Tuesday it had suspended the certification process because the Swiss-based consortium behind Nord Stream 2 needed to form a company under German law to secure an operating licence.
Skyrocketing gas prices jumped 9 per cent on the regulator's move amid fears that Europe will face a crippling shortage this winter and be forced to bow to Vladimir Putin's demands to keep houses warm on the Continent.
It comes as Putin faces fury for two crises on Europe's doorstep: the 'weaponising' of migrants on the Polish border by the Kremlin-backed Belarusian tyrant Alexander Lukashenko, and a buildup of Russian troops on Ukraine's eastern front.
Mr Johnson last night gave a speech in which he warned EU allies that a 'choice is coming' between importing Russian gas and 'sticking up for Ukraine.'
German regulator, Bundesnetzagentur, said on Tuesday it had suspended the certification process because the Swiss-based consortium behind Nord Stream 2 needed to form a company under German law to secure an operating licence (pictured: Chancellor Angela Merkel speaking Berlin on November 5)
The PM also accused Lukashenko of an 'abhorrent' attempt to engineer a migrant crisis in an effort to undermine European unity.
Speaking at the Lord Mayor's Banquet in the City of London, the PM said: 'We hope that our friends may recognise that a choice is shortly coming between mainlining ever more Russian hydrocarbons in giant new pipelines and sticking up for Ukraine and championing the cause of peace and stability.'
Speaking at the Lord Mayor's Banquet in the City of London, the PM said: 'We hope that our friends may recognise that a choice is shortly coming between mainlining ever more Russian hydrocarbons in giant new pipelines and sticking up for Ukraine and championing the cause of peace and stability.'
Germany, like much of Europe, relies on Russia for its natural gas, accounting for around 40 per cent of Berlin's imports. That compares with under 5 per cent for the UK, which imports most of its gas from Norway.
Moscow has already used a route under the Baltic Sea for Nord Stream 1 - the predecessor to Nord Stream 2 - which has a capacity of 55 billion cubic metres (bcm), equivalent to half Germany's annual gas usage.
Nord Stream 2 will double that and make Germany a central arrival hub for European gas volumes for onward distribution.
German regulator Bundesnetzagentur said that it would only consider the Nord Stream 2 application after a transfer of major assets and budgets for staffing to a German subsidiary.
"A certification for the operation of Nord Stream 2 will only be considered once the operator is organised in a legal shape compliant with German law," it said.
Once these preconditions had been met, the regulator said it could continue assessing the submission in the rest of the four-month application period that runs to early January.
Nord Stream 2 said it had been notified by the regulator. "We are not in a position to comment on the details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations," it said in a statement.
The Kremlin was not immediately available to comment.
The regulator said the Swiss company had decided not to turn itself into a German company but had set up a subsidiary under German law to deal with the section of the pipeline on German territory.
Vladimir Putin (pictured in Moscow on Monday) faces fury for two crises on Europe's doorstep: the 'weaponising' of migrants on the Polish border by the Kremlin-backed Belarusian tyrant Alexander Lukashenko, and a buildup of Russian troops on Ukraine's eastern front
Map showing points of origin and destination of the Nord Stream pipe (solid line) and Nord Stream 2 pipeline (dotted line) between Russia and Germany. Putin hoped Nord Stream 2 would be finished two years ago, allowing Russia to bypass Ukraine in the south, which carries 50% of gas from Russia out via Poland
European and British wholesale gas prices have spiked in recent weeks amid heightened concerns over supplies from Russia and uncertainty around the timing of their arrival.
European prices jumped 9% on Tuesday with the Dutch front-month contract briefly trading at 89.00 euros/MWh.
"Any delays in the pipeline certification, all the more so on the eve of winter, is not in the interests of the European Union, that's without any doubt," Konstantin Kosachyov, deputy chairman of Russian parliament's upper house, told TASS news agency.
The head of the Ukrainian energy firm Naftogaz told Reuters he welcomed the German energy regulator's decision.
"Good," Yuriy Vitrenko said in a message. "This is an important point, which suggests that the German regulator shares our position that certification cannot only apply to the pipeline in Germany, but should apply to the entire pipeline from the territory of the Russian Federation to the territory of Germany."
Ukraine opposes the Russian-led project. Kiev will lose revenues if gas from Russia bypasses it and it accuses Moscow of using energy as a weapon to threaten Europe's security.
Moscow has denied this and says Nord Stream 2 is a purely commercial venture that complies with European energy rules.
The spat over the pipeline has fed into broader tensions between Kiev and Moscow.
Ukraine has successfully applied to be part of the consultation process to certify the pipeline.
The German regulator said the Berlin economy ministry and the European Commission had been made aware of its notice to Nord Stream 2.
The Commission has two months after the German regulator's decision to assess the application for its part.
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