Germany cannot use Nord Stream 2
Germany cannot use Nord Stream 2 - a new alternative pipeline - to transport natural gas from Russia, although the regular route, Nord Stream 1, has been suspended for maintenance, the German government said on July 18.
Nord Stream 2 is united and does not have a legal license to operate, TASS quoted Beate Baron, a representative of the German Federal Ministry for Economics and Climate Action, as saying at a meeting in Berlin.
The announcement came as Russian oil and gas giant Gazprom declared it force majeure against gas supplies to the EU via Nord Stream 1. The pipeline is closed for maintenance until July 21. However, Germany is concerned that Gazprom will not continue supplying gas when the pipeline is completed.
Meanwhile, the Nord Stream 2 pipeline - running from Russia to Germany across the Baltic Sea - is capable of transporting 55 billion cubic meters of gas per year and was completed in September last year. However, the certification process has been repeatedly delayed due to US opposition and concerns in Europe about increasing energy dependence on Russia.
In February, before Russia launched a military campaign in Ukraine, German authorities refused to certify the Nord Stream 2 pipeline and the project was suspended indefinitely.
Last month, Gazprom CEO Alexey Miller said the pipeline was ready for operation and could start pumping gas to Germany at any time.
Meanwhile, Der Spiegel magazine, citing information from the German Ministry of Economy, said that the German government is considering reusing parts of Nord Stream 2 to use for liquefied natural gas (LNG).
Berlin is said to want to take over Germany's Nord Stream 2 pipeline by cutting it off the rest and turning it into a connection to an LNG terminal on the Baltic coast.
In response, Russia said it would take legal action against Germany, which imported about 55% of Russia's gas last year.
Germany has leased four floating storage and recycling warehouses (FSRU) to recycle LNG at sea. The recycled LNG will then be transferred to the shore pipeline systems.
The country is also considering reusing the onshore pipelines that were intended to transport Nord Stream 2 gas.
German industry is at risk of "callop failure"
Industrial companies across Germany are facing a real prospect of having to scale up operations or completely close if there is no Russian gas - the Financial Times reported on July 18.
According to the publication, Germany's largest steel maker ThyssenKrupp and the world's largest chemical company company BASF have warned that if there are not enough natural gas supplies, their plants could be forced to stop operations or completely close and could even suffer technical damage.
Petr Cingr - CEO of SKW stickstoffwerke Piesteritz, Germany's largest am am am amended producer and Europe's main fertilizer supplier - said: "Without Russian gas supplies, we would have had to stop production immediately, from 100 to 0".
The warning comes amid uncertain gas supplies from Russia, as the country's Gazprom was forced to cut 60% of its Nord Stream 1 pipeline supplies last month due to technical problems stemming from Russian sanctions.
According to the Financial Times, some companies hope to switch to alternative fuels, such as heating oil or coal, if they do not have Russian gas. However, according to the estimate of the chemical industry cited by the newspaper, only 2-3% of the gas consumed can be replaced in this way.
Analysts at Swiss bank UBS said that without Russian gas, Germany would have to endure a serious decline in industrial production, leading to a "deep economic downturn", with nearly 6% of GDP wiped out by the end of next year.
Last month, the German government initiated phase two of the national emergency plan, with the next step being the application of gas distribution. The energy crisis has also caused Europe's standard gas prices to increase 8 times over the past 18 months, increasing the total cost of living in Europe's leading economy.
