Russias "signal" was clear: without Nord Stream 2, there would be no extra European gas

Russia has hinted that it will bend over backwards to provide Europe with extra gas to ease the current energy crisis unless it gets something in return: regulatory approval to ship gas through the Nord Stream 2 pipeline.

Citing sources close to the gas giant Gazprom the Kremlin, Bloomberg news reported that Russia wanted everyone to know that Europe was trading off Nord Stream 2 with Germany the European Union in exchange for increased gas supplies.

Speaking at an energy conference last week, Russian President Vladimir Putin said Russia could provide more gas, but he also lamented the slow progress in getting Nord Stream 2 approved: "If we can increase deliveries through this route, it will greatly ease the tension in the European energy market. But we are able to do that right now because of administrative barriers."

Konstantin Kosachyov, a member of the upper house of the pro-russian government, said more recently: "We can't just go fix a mistake that we didn't make. We're fulfilling all our contracts, all our obligations. Everything else should be voluntary reciprocal."

Nord Stream 2 travels 1,200km Vyborg, Russia, across the Baltic Sea, Ukraine Poland to Lubmin, Germany. The pipeline has been completed but is awaiting regulatory approval to begin supplying Europe with 55bn cubic metres of gas a year. On Monday, Nord Stream 2 said its first production line was ready to start operations, but could be shipped until it received regulatory approval.

The Nord Stream 2 announcement came hours after news that Gazprom had once again bid for only a small amount of capacity, limiting the flow of gas to Europe via alternative routes, sending prices soaring again that day. While Russian exports to Europe have increased this year last year's weakest levels, they are still behind 2019 levels, according to the Oxford Institute for Energy Studies. Daily shipments fell in October slow replenishment at Gazprom's European storage facilities added to the upward pressure on prices.

Gas prices in Europe are now more than five times higher than a year ago, soaring fuel costs are an increasingly negative impact on the European economy. If energy prices do collapse, soon, pressure will grow on Europe to find gas at all costs. Russia, for its part, is entirely up to it if it is willing to give up the margin of additional gas exports as long as it complies with the contract.

Russian gas is seen as Europe's main way to avoid more severe supply shortages during the winter. European mainstream public opinion will lack of gas attributed to Russia, that this year's gas shortage in Europe is mainly Russia's "intentional", have called for Russia to increase the sale of natural gas. Russia blames Europe's energy crisis on a hasty shift to reliance on spot markets new sources of energy.

Nord Stream 2's approval now looks set to last until next year. German regulators are currently reviewing the project's application for certification, but say their initial decision can only be made in January, after which approval the European Commission is required. While Gustav Gressel, senior policy fellow at the European Council on Foreign Relations, previously said it was only a matter of time before Germany's energy regulator approved the plan, analysts said it would be easy, with several key obstacles:

1. The United States has long opposed the pipeline, saying it increases Europe's dependence on Russian energy.

2. Poland Ukraine oppose the pipeline on energy security grounds. They fear the pipeline could reduce the flow of natural gas to Europe via Ukrainian pipelines.

3. Critics say the pipeline is inconsistent with Europe's climate goals is likely to increase Russian President Vladimir Putin's economic political influence over the region.

Zerohedge, a financial blog, commented that Russia's elite lawyers could find all the loopholes that would allow it to ship far less gas than before while adhering to the terms of the contract. if Europe freezes this winter, it has no one to blame but itself.

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Source: International Gas Network