Nord Stream 2 opens German subsidiary to gain regulatory approval

The operator of the controversial Nord Stream 2 gas pipeline linking Russia to Germany has created a German subsidiary to bring the project into line with German legislation.

Nord Stream 2 AG said in a statement on January 26 that the subsidiary, Gas for Europe GmbH, would become the owner and operator of the 54-kilometer section of the undersea gas pipeline in German territorial waters and the landing facility on the German coast of the Baltic Sea.

Germany’s Federal Grid Agency energy regulator announced in November that it had suspended the certification process for the $12 billion pipeline, saying Swiss-based Nord Stream 2 AG must first form a legal entity in Germany. Nord Stream 2 AG is half-owned by Russian state-owned Gazprom as part of a consortium with European energy companies.

The regulator told AFP news agency that the process is still on hold until fixed assets and human resources are transferred to the subsidiary and all documents can be reviewed.

“We cannot at this time predict when the process will start again,” said a spokesperson for the regulator.

The pipeline, which would double Germany’s natural gas supply and help ease a European energy crisis, was completed in September after years of controversy.

Critics say the project will increase Europe’s dependence on Russian gas and could be used to exert political pressure. Ukraine fears losing gas transit fees from existing pipelines.

Russia’s military buildup near Ukraine has refocused Nord Stream 2, with Germany saying the pipeline would likely be scrapped in the event of a Russian attack on Ukraine.

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