Now it is finally clear: Nord Stream 2 will definitely not be operational by the end of 2021, since its certification will drag on until spring or even summer 2022. These conclusions follow from the decision taken on November 16 by the Federal Networks Agency (BNetzA) in Bonn to temporarily suspend the certification procedure for the Russian gas pipeline, which began on September 8, 2021, or, more precisely, its operator Nord Stream 2 AG. This wholly owned subsidiary of Gazprom is registered in Switzerland in the canton of Zug, where its headquarters are located.
Not technical certification, but a decision on the status of an independent operator
In this case, it is not about technical certification, not about confirming whether the characteristics of the pipes laid on the bottom of the Baltic Sea meet the existing standards, but about the certification of Nord Stream 2 AG as an “independent operator of the transport system”. This is necessary to prevent Nord Stream 2 from falling under the antimonopoly 3rd energy package of the EU and Gazprom to be able to use both lines of the gas pipeline, not just one.
Federal Agency for Networks building in Bonn
BNetzA’s decision is of a purely legal nature. “The reason for the suspension is the change in the organizational and legal form on the part of Nord Stream 2 AG”, – stated in the official notification of the German regulator about the progress of the case under the number BK7-21-056.
The change in the organizational and legal form became necessary after the Federal Grid Agency, after reviewing the submitted documents, came to the conclusion that it would be able to certify the Nord Stream 2 operator only if its legal form complies with the laws of the Federal Republic of Germany. In other words, if the operator is registered as a German company.
Nord Stream 2 AG establishes German subsidiary
Thereafter, the Swiss Nord Stream 2 AG “decided not to reorganize the existing company, but to establish, in accordance with German law, a subsidiary only for the German section of the pipeline. This subsidiary will become the owner and manage the German section of the pipeline,” explains the press release from BNetzA …
Executive Director of Nord Stream 2 AG Matthias Warnig at the St. Petersburg Economic Forum
At the moment, the transfer of assets and the transfer of personnel to the created company are underway, and until this process is completed and the new legal entity submits a full set of all necessary documents, the German regulator suspends consideration of the certification request. In fact, he is waiting for a new application from the new operator, which will no longer manage the entire Nord Stream 2, but only the section that is laid in the territorial waters of Germany.
At the same time, BNetzA emphasizes in its press release that it does not intend to consider this application as a new separate case, but “will continue the verification within the time that remains of the four-month period provided for by law.” In response to a request from DW, Fiete Wulff, a spokesman for the Federal Networks Agency, confirmed that the phrase should be understood as follows: the German regulator has now, as it were, stopped the clock and will only turn it on again after it can start reviewing the set of documents a new legal entity.
Decision-making on JV – 2 can take up to eight months
Thus, BNetzA will have two months without one week to complete the now temporarily interrupted certification, which has already taken two months and one week since September 8. Therefore, if the lawyers of Nord Stream 2 AG manage to prepare all the documentation by the beginning of December, then the consideration of the case should be completed by mid-February. If the certification procedure resumes only after the Christmas and New Year holidays, then it will end in mid-March.
After that, as reminded in a press release of the German regulator, its decision will be presented to the European Commission (EC) in Brussels. The EU executive body has two months to prepare its opinion, but it can request an additional two months. The German regulator is then given a further two months to announce its final decision. If it disagrees with the recommendation of the European Commission, it can file a complaint against Germany with the European Court of Justice in Luxembourg.
So, in the best case for Gazprom, if the certification procedure suspended in Germany resumes in December, the EC will manage in two months, after which BNetzA will immediately issue its positive verdict, gas via Nord Stream 2 will not flow until the end of April – early May.
In the worst case, the process of making a legal assessment of whether the 100% German subsidiary of the Swiss 100% subsidiary of the Russian semi-state concern Gazprom is the independent operator of the Nord Stream 2 gas pipeline could drag on until next summer – and even become the subject of consideration by the EU high court.
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