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Nord Stream 2

Olaf Scholz, Germany's Chancellor, suspended the certification process for the Nord Stream 2 natural gas pipeline following Russia's recongintion of separatist-held regions of Donetsk and Luhansk in eastern Ukraine. He called Russia's action in Eastern Ukraine a “serious break of international law.”

President Biden had waived sanctions against the pipeline when it was almost complete under an agreement that Germany would take action against Russia if it used gas as a weapon or attacked Ukraine.

The 764-mile-long (1,230km) natural gas pipeline under the Baltic Sea, directly links Russian gas to Europe through Germany. The pipeline has been filled but still needed approval by Germany and the European Commission.

Nord Stream 2 runs parallel to the earlier Nord Stream pipeline, doubling its capacity to 110 billion cubic meters of gas a year. Ukraine would have suffered financially from the pipeline losing billions of dollars in gas-transit fees.

On Wednesday, Biden said the US would impose sanctions against Nord Stream 2 AG, the company in charge of building the pipeline, and its bosses. The parent company is the Russian state-owned gas giant Gazprom. He also authorized more U.S. troops to join NATO forces in Estonia, Latvia and Lithuania as part of his response to Russia's aggression.

Since Europe has decommissioned their coal and nuclear plants, they require natural gas to supplement their energy needs before renewable energy sources are sufficiently built up. Meanwhile, Qatar, Japan and other countries have been approached by the US to reroute gas supplies to Europe if the conflict escalates. However, Doha said on Tuesday that neither it nor any other single country has the capacity to replace Russian supplies.

Former Russian President Dmitry Medvedev, now deputy chair of Russia’s Security Council, said via Twitter, "Welcome to the brave new world where Europeans are very soon going to pay 2,000 euros for 1.000 cubic meters of natural gas!"

Ukrainian Foreign Minister Dmytro Kuleba responded that it was the "morally, politically and practically correct step in the current circumstances."

The spot market gas price in Europe was 829 euros ($940USD) per thousand cubic meters Tuesday. It was 1,743 euros (about $2,000USD) in late December over the Ukraine crisis.

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