European gas prices rise as Russian pipeline suffers setbacks

MOSCOW/LONDON, Nov 17 (Reuters) – European gas prices soared again on Wednesday after delay in the approval process for an important new pipeline from Russia, die German government sources said they might just in March in be used next year.

German energy regulator suspended the process for getting the Nord Stream 2 pipeline up and run on On Tuesday, dimming hopes it will deliver significant gas to Europe in the upcoming months.

delays in the approval process for Nord Stream 2 has raised fears that Europe will get a third of its gas from Russia, could face power malfunctions this winter due to insufficient supply.

Higher energy prices are already disasters up inflation rates and on Wednesday the price of gas next month in The Netherlands, which is considered a benchmark for Europe, up 8% to hit 101.60 euros per megawatt hour (MWh).

The contract is met up almost 60% in November, although it’s still going well below a peak of 155 euros hit on 6 Oct.

“I expect that the start of Nord Stream 2 may be delayed until March 2022,” one German government sources told Reuters. read more

The price of gas in the begin of next year also Rose, with the market now expect large flows through Nord Stream 2 in the coming heating season for the winter, by die time demand could have already peaked.

The Dutch contract for gas in January jumped 7.8% to 101.61 euros per MWh on Wednesday, while UK wholesale gas price contract for the first three months of 2022 rose met nearly 12% to 2.45 pounds per therm.

Some analysts said the certification process could drag on on for months because Brussels will need until give it’s the green one light as soon as the German regulators have made their recommendations.

“We now estimate that certification cannot be completed until around April next year at the earliest, with sufficient potential for an extension to met August 2022, given the probability of a moment more strict evaluation at the next review phase of the European Commission,” Rystad Energy’s Gas Markets analyst Zongqiang Luo said.

REPLACE INFLATION

European governments struggle to soften the blow for both consumers and businesses with emergency measures such as: price caps and subsidies.

Higher energy prices in Europe and around the world to be already work through in the inflation rates, die possible in prompts policymakers to raise interest rates earlier than expected.

Data published on Wednesday showed inflation data in both European Union and Britain jumped above 4% in October, more then double central bank goals, with gas prices paid by UK consumers, for example, sky-touching 28%.

gas prices in Europe were also supported by a decline in export this week from Norway, another key supplier to Great Britain and the EU, because of: maintenance work on its gas infrastructure.

Germany’s energy regulator said it had halted certification of Nord Stream 2 because it in Switzerland-based consortium behind the pipeline die necessary to form a German subsidiary under German law to operating license.

in to be first comments since news of the delay, the Kremlin said the certification was a “complicated process” and that it did not see politics behind the decision.

Spokesperson Dmitry Peskov said the consortium agreements have been concluded with requests from the German regulator in a timely fashion and Russia must be patient.

Russian gas flows through the Yamal-Europa pipeline to Germany were stable on Wednesday and higher levels in the weekend, data from German network operator Gascade showed.

the pipeline, die runs by Belarus, that is in the middle of a migrant crisis and aoff with the west, is one of the main routes for Russian gas exports to Europe.

Add to worry over possible interruptions of gas export from Russia, Belarusian leader Alexander Lukashenko has warned that he may shut the pipeline in a row with the European Union.

Flowing through the Yamal-Europe pipeline to Germany at the Mallnow metering point on the Polish border ran at an hourly volume of over 12,500,000 kilowattshours (kWh) on Wednesday, about the same as Tuesday, the data showed.

Reporting by Vladimir Soldatkin in Moscow, Susanna Twidale and Bozorgmehr Sharafedin in London, Robert Muller in Prague and Vera Eckert and Andreas Rinke in Frankfurt; Editing by David Clarke and Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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