Gas jumps 6% after Berlin suspends approval of Nord Stream 2

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Gas prices jumped about 6 percent in overnight trading on Tuesday, after a German government body suspended approval of the Nord Stream 2 pipeline, the new carrier of Russian gas to Europe via Germany.

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By 17:48 (GMT), gas prices for December delivery rose 30 cents, or 5.84 percent, to trade at $5.32 per million British thermal units.

During trading, crude contracts jumped by about 11 percent, before losing part of their gains.

The German Energy Authority said in a statement that it had temporarily suspended the approval process for the Nord Stream 2 pipeline.

“Because the alliance behind the pipeline needs to first set up its subsidiary in Germany under German law (as a condition) to obtain an operating license.”

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Nord Stream 2 is facing strong opposition from the United States and some European countries such as Poland.

On the pretext that it increases Europe’s dependence on Russian gas, which threatens the energy security of the continent.

The pipeline was completed last September and connects Russia with Germany via the Baltic Sea with a length of 1,230 km, and a pumping capacity of 55 billion cubic meters of gas annually.

And on Monday, gas contracts jumped by about 11% as well, after the stoppage of gas pumping through the Yamal-Europe pipeline.

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Which passes through the territory of Russia and Belarus, at a time when Europe is experiencing an unprecedented crisis in gas supplies.

The capacity of the “Yamal-Europe” pipeline is about 33 billion cubic meters per year.

Gas prices in Europe have risen by about 200% since the beginning of 2021, which experts attribute to the tight supply in the face of an increasing rise in demand due to expectations of a harsh winter this year.