TTF front month jumps as German regulator reiterates Nord Stream 2 certification timeline
LONDON (ICIS)–Germany’s energy regulator BNetzA on Thursday said the final decision on the certification of the Nord Stream 2 pipeline cannot be expected in the first half of 2022, which sent new bullish signals across European wholesale natural gas markets.
As the German regulator referred to the final decision on the pipeline’s certification, the timeline broadly matches market expectations from earlier announcements.
Nevertheless, the Dutch TTF January ‘22 contract gained €3/MWh on the back of the news around 10:30am London time but receded before noon. Headlines around Nord Stream 2 certification process have been a major driver for European hubs amid low level of gas in storage sites. After reaching a new record high at Wednesday’s close the TTF front month opened the Thursday session higher still, prior to the BNetzA announcement.
Initially, when the certification procedure started on 8 September, the deadline for BNetzA to make the final decision was 8 July. But the procedure was suspended in mid-November due to more administrative work and documents being required from the project’s promoters.
As the procedure remains suspended since then, it was to be expected that the initial 8 July deadline could be pushed back to a later date next year.
The German regulator has up to four months to make a draft decision on whether the pipeline is compliant with EU and German legislation.
With the procedure having officially started on 8 September and having been suspended on 16 November, the German regulator will have roughly six weeks to make a draft decision once it resumes the procedure.
There is currently no indication on when the procedure could restart. But a document sent by the German embassy in Washington to the US Congress in late November indicated that a draft decision could be made in March, followed by the European Commission issuing its position between May and July and the final decision made between July and September.
This already indicated expectations of delays well into the second half of next year, which was confirmed by today’s statement from BNetzA.
After the German regulator makes its draft decision it must submit it to the commission.
The commission will then have two months, extendable by another two months, to issue an opinion on the regulator’s draft decision.
Once the commission has issued its opinion, the German regulator has two months to make a final decision.
While the German regulator has to take into account the commission’s opinion, it does not have to follow it if it disagrees with it. The German regulator has the final word on whether to certify Nord Stream 2 compliant with EU and German legislation.