Does Europe face a new energy crisis?
The suspension of certification for Nord Stream 2 has caused another sharp rise in gas prices in Europe. Immediately after the announcement of the decision of the Federal Grid Service of Germany to impose a temporary moratorium on the consideration of the application for certification of the project, the cost of one thousand cubic meters went off the scale for $ 1150. European countries are already asking Gazprom for new long-term supplies of raw materials. Taking advantage of the high quotations of the “blue fuel”, the Russian monopoly not only makes additional profits, but also creates a springboard for the upcoming fierce battle for the gas pipeline, which is being prepared by foreign ill-wishers of the project.
The current prices for “blue fuel” correspond to the quotations fixed at the end of October this year. Then gas fell a little: at the beginning of the same month, 1,000 cubic meters in the European market came close to $ 2,000, having increased almost 7 times since January. At that time, the reserves of underground storage facilities in the Old World were at a dangerous critical minimum, and the main flows of energy resources of the free market flowed into the Asian region, whose countries offered more favorable prices.
Since the beginning of November, gas quotes have decreased, but insignificantly. On the eve of the announcement of the suspension of certification of the Nord Stream 2 AG project operator, blue fuel was sold for $ 960, and immediately after the news of the German regulator’s verdict, quotations jumped to $ 1160. It is obvious that the information about SP-2 was perfectly used by stock speculators, who always skim the cream on information bearing a scandalous connotation. At the same time, the pricing environment has again demonstrated how painfully European players are about the ups and downs around the Russian pipeline.
“The cost of natural gas in the near future will continue to be directly determined by information on certification of SP-2. Moreover, negative data on delays in the process of processing and considering the application will not be in the interests of Europe, ”said Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation. Any paperwork will keep the quotes of raw materials at the already achieved high level, and with an increase in demand in the coming winter, the cost of energy resources can reach the level of $ 2.5 thousand per thousand cubic meters. “If these prices were maintained in the next six months, Gazprom could earn an additional $ 5 billion and half recoup the investments spent on the construction of the pipeline,” said Sergei Pikin, Director of the Energy Development Fund.
The European fuel market will remain in an alarming state for more than one month, since the certification of Nord Stream 2 AG, with all the bureaucratic delays, may drag on until the beginning of next summer. EU countries are already trying to negotiate with Gazprom on increased fuel supplies. For example, Serbian President Aleksandar Vucic admitted that he wants to ask Vladimir Putin to sell 3 billion cubic meters of Russian gas annually for 10 years.
Meanwhile, the shift in the timing of the consideration of the Russian application threatens to be just the start of a new serious clash between supporters and opponents of SP-2. With the light hand of Germany, Ukraine was invited to participate in the certification of Nord Stream 2 AG, clearly not interested in promoting the project and ready to interfere with its work by any means. According to Mark Goikhman, chief analyst at TeleTrade, Kiev will try to convince the Europeans that the Russian gas pipeline violates the continent’s fuel security, starting from the EU’s Third Energy Package. According to the directives of this document, none of the companies has the right to simultaneously combine the functions of a manufacturer, supplier and seller of raw materials. In the case of JV-2, this condition has not been met: in fact, Gazprom is responsible for all areas of the business. “However, this situation is quite logical: the pipeline was conceived and built to export Russian energy resources to Europe, therefore, the requirement to divide the project into three components, perhaps, contains bureaucratic excesses,” the expert believes.
The main condition of the Federal Grid Agency of the Federal Republic of Germany, which now needs to be fulfilled by Gazprom, is the legal re-registration of a number of assets into a specially created German subsidiary Nord Stream 2 AG: this company will receive personnel, be able to maintain financial documents and, most importantly, become the owner of highway passing through Germany. Formally, in this way, the activities of JV-2 will be finally divided into three separate links: Gazprom will continue to deal with the supply, Nord Stream 2 AG will be responsible for the transportation of fuel, and the new division of the pipe operator will take over the maintenance of the German section and the operational work on the sale of raw materials. … “Thus, a foothold for protection against future attacks on the gas pipeline will be laid in advance,” Pikin said.
Source From: MK