A Swiss court’s unexpected ruling could stir up the German election campaign: the liquidation of the Nord Stream 2 AG will not proceed as expected. Instead, the court has decided to suspend the decision “until May 9, 2025” citing the complex geopolitical situation and the upcoming German elections in February 2025, which could have a significant impact on the situation of the Nord Stream 2 AG.
The court’s main reasons for the suspension are the complex geopolitical situation and the upcoming German elections in February 2025, which could have a significant impact on the situation of the Nord Stream 2 AG.
The Nord Stream 2 AG, owned by the Russian Gazprom, was intended to deliver Russian gas through the Baltic Sea to Germany. The 1,200-kilometer pipeline was completed, but never put into operation. After February 2022, business was halted and in September 2022, one of the Nord Stream 2 pipes and both pipes of the already operating Nord Stream 1 were destroyed by sabotage.
The company’s management is sitting on high debts and the court in Zug has since January 2023 granted several extensions to prevent insolvency. Insolvency would result in Gazprom and investors, such as the state-owned German energy company Uniper, losing control over the project.
The unusual extension of the insolvency proceedings suggests that political considerations are at play. Uniper has not objected to the extension, as reported by court records. The German Federal Ministry of Finance, responsible for overseeing Uniper, is led by SPD Minister Jörg Kukies.
Sascha Müller-Kraenner of the German Environmental Association asks why Uniper accepted the extension: “Is the German government secretly planning to put the Nord Stream 2 pipeline back into operation?”
The Economy Ministry of Robert Habeck denied any involvement, stating, “Germany is no longer dependent on Russian gas.” A spokesperson for SPD Minister Kukies was less clear, saying, “We will continue to work on protecting our rights.”
Background: Uniper was involved in the financing of the pipeline to the tune of nearly a billion euros. An alternative use of Nord Stream 2 could help avoid large write-offs.
US investor Stephen Lynch, a Trump ally, has reportedly applied to the US Finance Ministry to bid on the pipeline if it is sold in the course of insolvency proceedings. The US has sanctioned Nord Stream 2 since 2019, so Lynch requires an exemption.
His argument: If the pipeline is in American hands, the US government would have more influence in potential peace negotiations between Russia and Ukraine.
Experts discuss various possibilities for the pipeline. One option is the connection to a planned hydrogen network from Finland to Germany.
However, a return to the original use as a gas pipeline could be possible in the long run, if the political situation changes.
Jacopo Pepe of the Stiftung Wissenschaft und Politik emphasizes: “Of course, a restart of Nord Stream as a gas pipeline would increase the flexibility in Germany’s energy supply. But that is dependent on a political solution and the resumption of gas deliveries from Russia must not be used as an offer in peace negotiations. Germany must also clarify what role gas will play in its future energy mix.