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The Nord Stream 2 gas pipeline should not be singled out and viewed “in isolation” given Europe’s continued need for all sources of gas supply, the head of Austria’s OMV said Feb. 3.
Speaking after OMV released its fourth quarter results, CEO Alfred Stern said European gas demand would remain high in the near future and that Nord Stream 2 should be considered as part of the overall supply picture.
“I believe that neither Nord Stream 2 nor any other distribution channels need to be seen in isolation,” Stern said.
“We should be aware of the fact that we need gas in Europe — there is a shortage of gas, production levels are going down, and demand now and in the near future will remain high,” he said.
OMV was a co-financier of the 55 Bcm/year Nord Stream 2 pipeline along with Shell, France’s Engie, and Germany’s Wintershall Dea and Uniper.
OMV loaned a total of Eur729 million ($822 million) to help finance the pipeline project, and began receiving repayments and interest payments from Gazprom in the second half of last year.
Certification process
The pipeline is now complete and already filled with gas, but commercial flows cannot begin until the certification process for the pipeline operator is completed.
That process is to remain on hold until assets are transferred to Nord Stream 2’s new German subsidiary and relevant documentation checked, a spokesperson at the German regulator said Feb. 2.
The Bundesnetzagentur had four months from Sept. 8 to issue a draft decision on certification, but the process was suspended on Nov. 16 to allow for Switzerland-based Nord Stream 2 AG to transfer assets to the new German subsidiary.
Nord Stream 2 AG said on Jan. 26 it had founded the new German subsidiary — Gas for Europe GmbH — which is to become the owner and operator of the 54-km section of the pipeline located in German territorial waters.
The delay to the certification process continues to push back the start date for the pipeline.
According to S&P Global Platts Analytics, the start of flows through Nord Stream 2 is now expected in October 2022.
The protracted certification process for Nord Stream 2 has also been a significant contributor to the recent gas price strength in Europe.
The TTF day-ahead price hit an all-time high of Eur182.78/MWh on Dec. 21, an increase of 985% year on year, according to S&P Global Platts price assessments.
Prices have cooled since, though they remain at historic highs. The TTF day-ahead contract was assessed Feb. 2 at Eur76.18/MWh, still a year-on-year increase of 320%.
