Nord Stream 2 Opens German Subsidiary To Get Regulatory Approval

The operator of the controversial Nord Stream 2 gas pipeline running from Russia to Germany has created a German subsidiary company to bring the project in line with German law.

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 pipeline in German territorial waters and the landfall facility on Germany's Baltic Sea coast.

Germany's Federal Network 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 Russia's state-controlled Gazprom in a consortium with European energy companies.

The regulator told the AFP news agency that the process was still suspended until capital assets and human resources are transferred to the subsidiary and all documents can be reviewed.

"We cannot at the moment predict when the process will begin again," a spokesman for the regulator said.

The pipeline, which would double natural-gas supplies to Germany and help ease a European energy crunch, 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 apply political pressure. Ukraine is concerned it will lose gas-transit fees from existing pipelines.

Russia's military buildup near Ukraine has put renewed focus on Nord Stream 2, with Germany stating the project would likely be scrapped in the event of a Russian attack on Ukraine.