Gas prices in Europe are jumping again today as delays in the process of approving the new pipeline by Russia intensify concerns about the course of Europe’s supply in the midst of difficult winter weather.
The German energy authorities suspended the procedures for the approval of the operation of the Nord Stream 2 pipeline on Tuesday, reducing the hopes that there will be a significant increase in supply in the near future.
The December contract for gas delivery to the Netherlands, the key contract for Europe, jumped almost 8% on Wednesday to 101.30 euros per megawatt hour. This is the highest level since October 18.
The contract for January gains 7.8% at 101.61 euros per megawatt hour, while the British contract for the first three months of 2022 climbs with a rally of almost 12% at 2.45 pounds per thermal unit.
“The timeline for the start of the pipeline appears to be further away than we previously expected,” Goldman Sachs analysts said in a note, according to Reuters. Analysts are now waiting for the pipeline to start operating in February next year.
The delay until March 2022
The decision of the German authorities to suspend the licensing procedures for the Nord Stream 2 pipeline could delay the operation of the infrastructure until March 2022, government sources told Reuters.
“The launch of Nord Stream 2 could be delayed until March 2022,” a government source told the agency.
The source cited the need for Russian Gazprom to set up a limited liability company under German law, adding that Gazprom has indicated it plans to do so.
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