Gazprom has announced the completion of construction of the offshore and onshore segments of Nord Stream 2, its controversial subsea gas export pipeline to Germany.
The Russian state-controlled gas monopoly quoted its executive chairman, Alexei Miller, as saying the construction phase concluded on Friday morning.
Miller has not provided an expected date for completion of commissioning and certification work on the twin pipeline that will be technically be capable of transporting more than 55 billion cubic metres per annum of Russian gas across the Baltic Sea.
Some reports have suggested that Nord Stream 2 might send first gas in early October, but Gazprom has not confirmed this.
The long-awaited confirmation of the pipeline’s competition did not ease the pressure on the spot market for natural gas at European trading hubs.
Prices touched $700 per thousand cubic metres again this week due to growing concerns about a possible shortage of gas in Europe during winter.
Russian Foreign Ministry spokeswoman Maria Zakharova said the start of “commercial gas deliveries via Nord Stream 2 will depend upon the position of the German regulator” on Gazprom’s access to the full transmission capacity of the project.
The Federal Network Agency, Germany’s market regulator, recently ruled that Gazprom can use only 50% of Nord Stream 2 capacity in order to comply with European gas market regulations.
With Gazprom classified as both owner of the pipeline and its sole shipper of gas, the other half of its capacity will have to be allocated for deliveries by third parties, according to the German ruling.
Russian President Vladimir Putin has provided no assurance to European customers that Gazprom will increase gas deliveries to the continent later this year.
Speaking at a press conference on Thursday, he blamed “nerds from the European Commission” for subjecting consumers to spot market pricing mechanisms.
He suggested that Europe should instead have signed long-term supply contracts with Gazprom, sticking to traditional pricing mechanisms linked to an index of averaged oil and products prices on the continent.
Such pricing formulae remove extreme volatility for customers, Putin suggested.
He said Gazprom has been supplying gas to Germany “at the average price of $220 per thousand cubic metres recently” under such contracts.
European underground gas storage is about 27 Bcm below the long-term average for this time of year, Putin said.
Gazprom has repeatedly refused to book additional spare transit capacity across Ukraine to Europe, even though contractual shipments of 40 Bcm fall far short of the transmission system’s capacity of 140 Bcm per annum.
Deliveries via the Yamal Pipeline to Germany, running across Belarus and Poland, have been erratic, ranging between 33.4 million cubic metres per day to 66.4 MMcmd since 1 September, according to German transmission operator Gascade.
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