German regulator puts brake on Nord Stream 2 in fresh blow to gas pipeline

By Vera Eckert

FRANKFURT (Reuters) -Germany’s energy regulator has suspended the approval process for a major new pipeline bringing Russian gas into Europe, throwing up a new roadblock to the contentious project and driving up regional gas prices.

The watchdog said on Tuesday it had temporarily halted the certification process because the Swiss-based consortium behind Nord Stream 2 first needed to form a German subsidiary company under German law to secure an operating license.

European prices jumped almost 11% on news of the hold-up, with the Dutch front-month contract hitting 90.40 euros/MWh in afternoon trade.

“This does push back expected timelines quite a bit,” said analyst Trevor Sikorski at Energy Aspects, adding that it was unclear how long the process of establishing a new company and reapplying for certification would take.

First flows through the pipeline look very unlikely in the first half of 2022, he added.

Nord Stream 2 has faced stiff opposition from the United States and some European states, which say it will make Europe too reliant on Russian gas. But other European governments say the link is vital to secure energy supplies, with gas prices surging in recent weeks and the threat of power outages looming this winter.

Nord Stream 2 said it had been notified by the regulator about the certification decision. “We are not in a position to comment on the details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations,” it added.

The Kremlin was not immediately available to comment.

“Any delays in the pipeline certification, all the more so on the eve of winter, is not in the interests of the European Union, that’s without any doubt,” Konstantin Kosachyov, deputy chairman of Russian parliament’s upper house, told TASS news agency.

The regulator, the Bundesnetzagentur, said it would only assess an application after a transfer of major assets and budgets for staffing to a German subsidiary.

“A certification for the operation of Nord Stream 2 will only be considered once the operator is organized in a legal shape compliant with German law,” it said.

Once these preconditions had been met, it said it could continue assessing the submission in the rest of the four-month application period. Before the suspension, that period was meant to run until early January.

Lawyers said the move, viewed by some gas market traders as politically charged, made sense from a regulatory perspective because it meant the pipeline’s operators in Germany would be answerable to local rules.

Essen-based law firm Rosin Buedenbender said a number of limited liability company options were available.

UKRAINIAN OPPOSITION

Ukraine is one country bitterly opposed to the pipeline, which has fed into broader tensions between Kyiv and Moscow at a time when the United States has accused Russia of building up troops near Ukraine in preparation for a possible attack, an allegation the Kremlin has dismissed.

Russia annexed Ukraine’s Crimean peninsula in 2014 and Moscow-backed separatists took control of the Donbass region in eastern Ukraine that same year.

The head of the Ukrainian energy firm Naftogaz told Reuters that he welcomed the German energy regulator’s decision.

“Good,” Yuriy Vitrenko said. “This is an important point, which suggests that the German regulator shares our position that certification cannot only apply to the pipeline in Germany, but should apply to the entire pipeline from the territory of the Russian Federation to the territory of Germany.”

Kyiv will lose revenues if gas from Russia bypasses it and it accuses Moscow of using energy as a weapon to threaten Europe’s security.

Moscow has denied this and says Nord Stream 2 is a purely commercial venture that complies with European energy rules.

Ukraine has successfully applied to be part of the consultation process to certify the pipeline.

Moscow has already used a route under the Baltic Sea for Nord Stream 1 – the predecessor to Nord Stream 2 – which has a capacity of 55 billion cubic meters (bcm), equivalent to half Germany’s annual gas usage.

Nord Stream 2 will double that and make Germany a central arrival hub for European gas volumes for onward distribution.

The Berlin economy ministry and the European Commission have been made aware of its notice to Nord Stream 2.

The Commission has two months after the German regulator’s decision to assess the application for its part.

“Under the current circumstances there is further downside for the timing of the start-up of Nord Stream 2 because even though Germany is more friendly towards this project than EU, the pipeline’s regulatory certification could face even more hurdles during the EU commission review stage,” said Carlos Torres Diaz, head of gas and power markets at Rystad Energy.

(Reporting by Vera Eckert Additional reporting by Vladimir Soldatkin, Pavel Polityuk, Nora Buli and Susanna Twidale; Writing by Pravin Char; Editing by Miranda Murray, Edmund Blair and Mark Potter)

Berlin market attack suspect killed in police shootout in Italy

The body of Anis Amri, the suspect in the Berlin Christmas market truck attack, is seen covered with a thermal blanket next to Italian officers in a suburb of the northern Italian city of Milan, Italy December 23, 2016.

By Emilio Parodi and Antonella Cinelli

MILAN (Reuters) – Italian police shot dead the man believed to be responsible for this week’s Berlin Christmas market truck attack, killing him after he pulled a gun on them during a routine check in the early hours of Friday.

The suspect – 24-year-old Tunisian Anis Amri – traveled to Italy from France, triggering a spate of criticism from euroskeptics over Europe’s open-border Schengen pact.

A police chief said his men had no idea they might be dealing with Amri when they approached him at around 3 a.m. (2200 EDT) outside a station in Sesto San Giovanni, a suburb of the northern city of Milan.

Amri is suspected of driving a truck that smashed through a Berlin market on Monday killing 12 people, and security forces across Europe have been trying to track him down.

The truck mowed through a crowd of people and bulldozed wooden huts selling Christmas gifts and snacks beside a famous church in west Berlin.

Militant group Islamic State acknowledged Amri’s death and his suspected role in the German attack – for which it has claimed responsibility – through its Amaq news agency.

“The executor of the Berlin attacks carries out another attack on Italian police in Milan and is killed in a shoot-out,” it said.

Milan police chief Antonio De Iesu told reporters that Amri had arrived in Milan’s main railway station from France at around 1 a.m. and had then traveled to Sesto San Giovanni, where two young policemen approached him because he looked suspicious.

“We had no intelligence that he could be in Milan,” De Iesu said. “They had no perception that it could be him otherwise they would have been much more cautious.”

He failed to produce any identification so the police requested he empty his pockets and his small backpack. He pulled a loaded gun from his bag and shot at one of the men, lightly wounding him in the shoulder.

Amri then hid behind a nearby car but the other police officer managed to shoot him once or twice, killing him on the spot. Amri was identified by his finger prints.

ITALIAN JAIL

De Iesu said that besides the gun, Amri had been carrying a small pocket knife. He also had a few hundred euros on him but no cell phone. Amri once spent four years in jail in Italy and police were trying to work out if he knew someone in Sesto.

A judicial source had earlier told Reuters that police had a tip off that Amri might be in the Milan area and that additional patrols had been sent out to look for him. De Iesu denied that, saying only that the authorities had recently ordered tighter security and more identification checks across the country.

“The two policemen simply decided to check up on a foreigner,” De Iesu said.

Leading euroskeptics were quick to blame the Schengen open pact for allowing the fugitive to travel easily.

“This escapade in at least two or three countries is symptomatic of the total security catastrophe that is the Schengen agreement,” said Marine Le Pen, who leads France’s far-right, anti-immigrant National Front party and is running for president.

“I reiterate my pledge to give back France full control of its sovereignty, its national borders and to put an end to the consequences of the Schengen agreement,” she said.

Amri had been caught on camera by German police on a regular stake-out at a mosque in Berlin’s Moabit district early on Tuesday, Germany’s rbb public broadcaster reported. His movements thereafter are not clear.

He had originally come to Europe in 2011, reaching the Italian island of Lampedusa by boat. He told authorities he was a minor, though documents now indicate he was not, and he was transferred to Catania, Sicily, where he was enrolled in school.

Just months later he was arrested by police after he attempted to set fire to the school, a senior police source said. He was later convicted of vandalism, threats, and theft.

He spent almost four years in Italian prisons before being ordered out of the country after Tunisia refused to accept him back because he did not have I.D. papers linking him to the north African country.

He moved to Germany and applied for asylum there, but this was rejected after he was identified by security agencies as a potential threat. Once again he could not be deported because of a lack of identification documentation.

A woman lays flowers near the Christmas market at Breitscheid square in Berlin, Germany, December 23, 2016, following an attack by a truck which ploughed through a crowd at the market on Monday night.

A woman lays flowers near the Christmas market at Breitscheid square in Berlin, Germany, December 23, 2016, following an attack by a truck which ploughed through a crowd at the market on Monday night. REUTERS/Hannibal Hanschke

A spokeswoman for Angela Merkel said the German Chancellor will discuss the deportation of rejected asylum applicants during a phone conversation with Tunisian President Beji Caid Essebsi.

The Berlin attack has put Europe on high alert over the Christmas period.

In the early hours of Friday morning, German special forces arrested two men suspected of planning an attack on a shopping mall in the city of OberhausenIn in the western state of North Rhine-Westphalia.

The men – two brothers from Kosovo, aged 28 and 31 – were arrested in the city of Duisburg on information from security sources, police said.

A police spokesman said there was no connection between the Duisburg arrests and the Amri case.

(Reporting by Michael Nienaber in Berlin, Anneli Palmen in Duesseldorf, Emilio Parodi, Elvira Pollina and Ilaria Polleschi in Milan, Antonella Cinelli and Gavin Jones in Rome; Writing by Crispian Balmer; Editing by Jeremy Gaunt)