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Tuesday, February 27, 2024

Nord Stream 2 gas pipeline firm given stay of bankruptcy

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A Swiss court has granted a six-month “stay of bankruptcy” to the operating company for the never-opened Nord Stream 2 pipeline, which was built to bring Russian gas to Germany but put on ice shortly before Russia invaded Ukraine in February.

The company’s stay was extended from January 10 through to July 10 by a regional court in the Swiss canton (state) of Zug, according to a notice published on Wednesday in the Swiss Official Gazette of Commerce.

Nord Stream 2 AG, a subsidiary of Russia’s Gazprom, is based in Zug. Nord Stream 2’s court-appointed administrator, Transliq AG, sought the extension.

German Chancellor Olaf Scholz’s government halted the certification process for the pipeline on February 22, after Russia recognised the independence of two separatist regions in eastern Ukraine.

Russian President Vladimir Putin ordered troops into Ukraine two days later, and US President Joe Biden President then directed his administration to impose sanctions on the Nord Stream 2 operating company.

The pipeline project had long drawn resistance from Ukraine and eastern European countries, as well as bipartisan opposition in the United States.

At the beginning of March, the operating company said it had dismissed all its employees in Zug, who numbered up to 110, according to local officials.

Russia once accounted for more than half of Germany’s natural gas supplies but started reducing deliveries in mid-June, citing alleged technical problems with the parallel Nord Stream 1 pipeline. It has not delivered any gas to the country since the end of August.

Mr Putin has periodically taunted the West by raising the prospect of sending gas through Nord Stream 2, a political nonstarter for the German government and others.

In September, undersea explosions damaged both Nord Stream 1 and Nord Stream 2. The prosecutor leading Sweden’s preliminary investigation said last month that investigators found traces of explosives at the site where the pipelines were damaged in an act of “gross sabotage”.

Investigators have not given indications of whom they think might be responsible.

Also on Wednesday Finland’s first floating liquefied natural gas terminal was moored at the southern port of Inkoo where it will supply gas to the Nordic country that was cut off from Russian gas imports earlier this year amid the war in Ukraine.

The massive 291-metre-long and 43-metre-wide offshore support vessel Exemplar, which sailed to the Baltic Sea from Spain earlier in December, has a capacity of 68,000 tons of LNG and is scheduled to be operational from the beginning of 2023.

FSRU Exemplar, owned by the US company Excelerate Energy, will ensure future availability of gas in Finland, replacing supplies earlier imported from Russia, Finland’s state-owned Gasgrid Finland said.

The vessel will reconvert LNG to gas which will then be fed into the Finnish network for distribution. The arrival of the Exemplar will also enable gas deliveries to the Baltic states — Estonia, Latvia, Lithuania — and possibly also to Poland through the undersea Balticconnector pipeline between Finland and Estonia that runs near Inkoo.

Russian energy giant Gazprom halted gas exports to neighbouring Finland in May, citing Helsinki’s refusal to pay in rubles, as Mr Putin has demanded European countries do since Russia invaded Ukraine.

Gazprom’s move marked a likely end to Finland’s nearly 50 years of importing natural gas from Russia. The two parallel Russia-Finland natural gas pipelines were launched in 1974.

Natural gas currently accounts for just some 5% of total energy consumption in Finland, a country of 5.5 million. Until May, nearly all of that gas came from Russia, and has been used mainly by Finnish industrial and other companies with only an estimated 4,000 households relying on gas heating.

As Moscow has cut off electricity exports to Finland — also in May — and the Finnish state-controlled oil company Neste has replaced imports of Russian crude oil with other sources, Finland’s energy ties with Russia are now all but gone.

Gasgrid Finland has leased the Exemplar for a period of 10 years for an estimated total cost of 460 million euros (£405 million).

European Union member Finland, which shares a 1,340-kilometre (830-mile) long border with Russia, applied to join Nato in May and is currently waiting for the remaining two members — Hungary and Turkey — of the military alliance to ratify its membership.

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