By: Lina Saigol – Barrons – Germany halted the Nord Stream 2 gas pipeline as the European Union prepares to levy tough economic sanctions on Russia over its deployment of troops into breakaway regions in Ukraine.
The $11 billion subsea pipeline, which was set to double direct Russian gas exports to Germany, is owned by Russian state-backed energy company Gazprom GZPFY-4.88%. The project has been awaiting regulatory certification from German authorities since October.
Dutch natural gas futures, the European benchmark, jumped more than 7% Tuesday to €79.39 euros per megawatt-hour.
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German Chancellor Olaf Scholz said Tuesday that he had asked the economy ministry to withdraw a key document needed to certify the Nord Stream 2 pipeline in response to Russia’s actions against Ukraine. “And without this certification, Nord Stream 2 cannot go into operation,” he told a news briefing in Berlin reported by Reuters.
Scholz said the economy ministry will make a new assessment of the security of our supply “in light of what has changed in last few days”.
Ukranian Foreign Minister Dmytro Kuleba welcomed Germany’s decision to suspend the certification of Nord Stream 2. “Under the current conditions, this is the right step from a moral, political and practical point of view. True leadership involves challenging decisions in difficult times. Germany’s move proves it,” he posted on Twitter.
His comments came as the European Union’s top officials said the bloc will impose more sanctions against Russia later today.
“Russia’s aggression against Ukraine is illegal and unacceptable, EU Commission President Ursula von der Leyen tweeted. “The Union remains united in its support for Ukraine’s sovereignty and territorial integrity. A first package of sanctions will be formally tabled today.”
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