Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to Gazeta.ru about the possible scenarios for Gazprom if Germany refuses Nord Stream 2.
Four Scenarios for Gazprom
Under the worst-case scenario (refusal to commission NS-2), Gazprom will have four options for further actions. The most realistic of them will be the appeal of the monopolist to the European court.
Another two options for Gazprom, according to Sergei Kondratiev, will be the conservation of the pipeline until “better times” and the dismantling of equipment. The fourth scenario is the sale of a controlling stake to European partners.
What will happen to gas prices
“Gazprom will have to hire European companies to dismantle the pipe. This may cost the monopolist €100-200 million. The sale of 51% of the monopolist's shares in the project seems more likely, that will bring the Russian company about €5-6 billion. The problem is that this amount will not be able to recoup the costs even for laying the offshore section of the gas pipeline, not to mention the onshore part,” the analyst explained.
The commissioning of NS2 in the fall of 2022 could lead to a one and a half decrease in stock gas quotations in Europe. If now February futures on the London ICE exchange are trading at $850-900 per thousand cubic meters, then with the launch of the pipeline, the cost of fuel will fall to an average annual rate of $500-700, Kondratiev says.
Should we expect a "thaw" in relation to NS2
According to Kondratiev, a shift in the issue of certification of the gas pipeline may come as early as April 2022 after the temporary recognition of nuclear and gas generation as “green”.
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