Nord Stream 2

Nord Stream 2 operator denies reports about filing for bankruptcy

Following reports that Nord Stream 2 AG has filed for bankruptcy, the Swiss-based company and the operator of the Russian gas pipeline has said it “cannot confirm” such reports.

Nord Stream 2

Earlier this week, it was widely reported that the builder of the namesake Germany-Russia gas pipeline is considering filing for insolvency following U.S. sanctions over Russia’s attack on Ukraine.

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“We cannot confirm the media reports that Nord Stream 2 has filed for bankruptcy. The company only informed the local authorities that the company had to terminate contracts with employees following the recent geopolitical developments leading to the imposition of U.S. sanctions on the company“, Nord Stream 2 stated on its website on Friday.

The company’s website is also down “due to serious and continuous attacks from outside” with its mobile and fixed network lines also unreachable.

The construction of the controversial 1,230-kilometre pipeline, which was under constant political turmoil, was completed last year but the project did not begin commercial operations as it was pending certification in Germany. The process was put on hold due to the escalating crisis.

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As a result of Russia’s attack on Ukraine and the related sanctions against Russia-related businesses, German company Wintershall Dea this week revealed its decision to write off its financing of the Nord Stream 2 project, totalling around €1 billion.

The German company was involved in the project together with its compatriot Uniper, British oil and gas major Shell, Austria’s OMV, France’s Engie and Russia’s Gazprom, which financed half of the $11 billion project.

On 28 February, Shell announced its intention to end its involvement in Nord Stream 2 while OMV said it plans to review its involvement in the project.

European governments are also seeking ways to end their reliance on Russian natural gas and the need to reduce this by looking to other suppliers, including via LNG, and to continue to pursue a well-managed acceleration of clean energy transitions.

Along these lines, Germany revealed intentions to build two LNG terminals in the near future, planned to be located in Brunsbüttel and Wilhelmshaven.

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German Chancellor Olaf Scholz announced the plan at a special session of the Bundestag on 27 February 2022 addressing Russia’s attack on Ukraine, highlighting that the country will increase the amount of natural gas in storage via long-term options to two billion cubic metres.

As the crisis continues to escalate, energy majors are exiting their Russian operations and projects, including BP, Equinor, TotalEnergies, Shell and ExxonMobil.

Meanwhile, oil prices touched a peak of $113 per barrel and eased to $111 on Wednesday, 3 March, amid growing fears about the impact of Russia’s attack on Ukraine and the result of related sanctions on supply despite the commitment by the IEA members to release millions of barrels from emergency reserves.

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