By Sarah Marsh and Madeline Chambers
BERLIN (Reuters) – Germany on Tuesday halted the Nord Stream 2 pipeline project in the Baltic Sea, planned to double the flow of Russian gas direct to Germany, after Russia formally recognized two breakaway regions in eastern Ukraine.
Europe’s most controversial energy project, worth US$11 billion, was completed in September but has sat idle awaiting certification from Germany and the European Union.
The pipeline was designed to ease pressure on European consumers facing record energy prices amid a broader post-pandemic cost-of-living crisis and on governments that have shelled out billions to try to cushion the impact on consumers.
But on Tuesday, the European reference price for gas, currently the Dutch March contract, rose 9.2% to 78.50 euros per megawatt-hour (MWh) in the morning, Brasília time.
Dmitry Medvedev, former president of Russia and now vice president of the country’s Security Council, sought to sprinkle salt on that wound.
“Welcome to the new world where Europeans will pay 2,000 euros for gas!” he said, according to the RIA news agency.
Germany gets half of its gas from Russia and has argued that Nord Stream 2 was primarily a commercial project to diversify energy supplies to Europe.
But despite the potential benefits, it faced opposition within the European Union and the United States on the grounds that it would increase Europe’s energy dependence on Russia, as well as deny transit fees to Ukraine, home to another Russian gas pipeline, and make her more vulnerable to Russian invasion.
“This is a major shift for German foreign policy with huge implications for energy security and Berlin’s broader stance towards Moscow,” said Marcel Dirsus, a non-resident fellow at the Institute for Security Policy at the University of Kiel.
“This suggests that Germany is really serious about imposing hard costs on Russia.”
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