Recently, a Swiss court extended the restructuring of debts to Nord Stream 2 operator - Nord Stream 2 AG - until May 9 and the Danish Energy Agency licensed Nord Stream 2 AG to maintain the damaged pipeline. The German government and industry companies are considering using sections of the Nord Stream 2 pipeline to transport green hydrogen from Finland.
However, geopolitical instability is at a particularly serious level, causing every discussion about the future of Nord Stream 2 to be speculative, Tatiana Mitrova, a researcher at the Center for Global Energy Policy at Columbia University, told NE Global.
Ms. Mitrova noted that the Nord Stream 2 gas pipeline is currently still a political and economically stuck asset. The Swiss courts extension of Nord Stream 2 AGs debt restructuring deadline reflects the uncertain financial situation, but the chance of recovering investment capital is limited. Legal options for German investors, such as the referee, are now available but uncertain," she said.
Chris Weafer - CEO of Macro-Advisory, a leading independent strategic business consulting firm in the European region - told NE Global that it seems that gas transportation between Germany and Russia will be resumed as soon as the peace process begins and shows signs of sustainability. Germany needs cheaper energy while Russia is willing to lower prices to regain market share.
However, Russian gas exports to the European market will not be able to return to pre-2022 levels. The EU wants to diversify safe energy supply while Russia also wants to diversify its customer base through gas exports to Asia, Central Asia, Iran and the Indian market.
"I hope the entire branch of the Nord Stream 2 pipeline, with a capacity of 28 billion cubic meters/year, will be put back into operation quite quickly after the peace process is established. If or when the peace deal is completed, I expect the second branch of the pipeline to be restored and increased to 55 billion cubic meters directly to Germany and receive a discount in 1-2 years," he said.
CEO Macro-Advisory does not believe that the Nord Stream 2 pipeline will transport Russian gas but could be used to transport hydrogen from Finland. I also expect these pipelines to be sold to a third party so that the supply contract will not be with Gazprom but with an intermediary. This will still be an important content in the period after the peace agreement is signed," he said.
When asked whether Russian gas could flow through Nord Stream 2 if an agreement was reached to end the Russia-Ukraine conflict, Ms. Mitrova said that a peace agreement would change geopolitical dynamics, but resuming Russian gas exports via Nord Stream 2 would still be unlikely.
The EU has shifted away from Russian energy, increased LNG imports and diversified suppliers. Even if Russia continues to export gas to Europe at a limited level, existing routes ( via Ukraine or Turkey) may be given priority over Nord Stream 2" - she said.
