Economic Watch: Nord Stream 2 to boost gas supply, facilitates energy transition in Europe

Source: Xinhua| 2021-09-09 17:24:13|Editor: huaxia

BRUSSELS, Sept. 8 (Xinhua) -- The Nord Stream 2, if put into operation smoothly by the end of this year, will boost gas supply and facilitate Europe's goal of energy transition.

The last section of the Nord Stream 2 gas pipeline has been welded into place and operators are aiming to have it in operation before the end of this year.

The new pipeline will be able to transport 55 billion cubic metres of gas per year, enough to supply roughly 26 million households, according to a Nord Stream 2 operator.

While the pipeline will have a limited impact in the short term on stabilizing global natural gas prices, analysts said in the long run it will provide Europe with better gas supply security and facilitate energy transition.

The soaring temperatures across Europe this summer compounded by the spread of the COVID-19 pandemic has pushed up demand for natural gas drastically. These factors also formed a strong support for natural gas prices in the international market.

Data showed that the price of natural gas in Europe has risen more than 10 times in less than one and a half years, and Benchmark Dutch natural gas prices in northwest Europe climbed above 15 U.S. dollars per million British thermal units in mid-August.

Therefore, it is estimated that the supply of about 5.6 billion cubic meters during the year is still completely inadequate, and natural gas prices will remain high for the foreseeable future.

This will undoubtedly intensify inflationary pressures in European countries, bring higher production and living costs to enterprises and consumers, and affect economic recovery.

Latest data from Eurostat showed that the inflation rate in the euro zone in August hit a 10-year high on an annual basis.

The stats also indicated that energy prices rose by 15.4 percent year-on-year, which mainly accounts for the increase in inflation that month.

Fortunately, in the long run, the Nord Stream 2 project will diversify European natural gas supply channels, help meet the long-term demand for imported natural gas in the market, and also meet the demands of a European energy structure transformation.

It is reported that the Nord Stream 2 project has a designed annual gas transmission capacity of approximately 55 billion cubic meters, which can transport Russian natural gas to Germany and other European countries.

Natural gas is a relatively clean fossil fuel with nearly 50 percent fewer emissions than coal and is more mature than traditional energy alternatives such as solar, wind, and nuclear energy that are still in the early stages of energy transition.

In July, the European Commission unveiled a comprehensive roadmap for realizing Europe's ambitious target of reducing its net greenhouse gas emissions by at least 55 percent from the level in 1990 by 2030 and to become climate-neutral by 2050.

The plan intends to transform the bloc's economy from one dependent on fossil fuels to one with net-zero emissions.

Countries have defended gas as a means to rapidly reduce carbon footprint. The appetite for liquefied natural gas is expected to grow by roughly 3.4 percent a year through 2035, outpacing other fossil fuels, according to a McKinsey & Co analysis. Enditem