Germany's network regulator suspended its ongoing process to certify the Nord Stream 2 pipeline after ruling that its operator within Germany does not comply with conditions set by German law.

The decision could amount to another setback for the controversial pipeline that has been waiting to become operational for almost a year.

Germany's Federal Network Agency said the operating company did not meet conditions to be an "independent transmissions operator," and it could be certified only "if that operator was organized in a legal form under German law."

Operational readiness stalled

The suspension comes as the Switzerland-based company Nord Stream 2 AG plans to establish a subsidiary under German law, but only for the German section of the pipeline. This decision was taken instead of "transforming its existing legal form," the regulator said.

The certification would stay suspended "until the main assets and human resources have been transferred to the subsidiary," the German officials added.

Nord Stream 2 said it had been notified by the regulator and said, "We are not in the position to comment on the details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations."

German Green party lawmaker Oliver Krischer welcomed the suspension by the regulator, saying that Gazprom had given the impression "of not taking German and European law seriously."

The move will "significantly delay the launch of the pipeline, which is therefore unlikely to play a role this winter," he told Germany's Rheinische Post newspaper.

The delay in the certification process is "another reason to expect that the pipeline will not be starting commercial operations until about mid-2022," Carlos Torres Diaz from the energy research firm Rystad Energy told The Associated Press.

Controversial project

The Nord Stream 2 pipeline is to transport gas from Russia to Germany and other countries. It is owned by Russian-controlled gas giant Gazprom with investment from several European companies.

The pipeline was built underwater to run through the Baltic Sea and bypass Poland and Ukraine, which have both raised objections. Ukraine stands to lose revenue if gas to Europe is not conveyed through its territory. Poland, for its part, fears the project will further strengthen Gazprom's already dominant position in the region.

The project has also been opposed by several other countries, including the United States, which says it will dangerously increase Europe's dependence on Russia for its energy supply.

However, despite opposing the pipeline in principle, the Biden administration in July dropped efforts to block it with sanctions, rather striking a deal with Germany that includes support for Ukraine and the threat of sanctions if Russia is deemed to "weaponize" fuel deliveries.

Critics recently accused Russia of deliberately cutting its gas supply to Europe as a ploy to speed up Germany's certification of the pipeline. Moscow has denied the allegations.

ab,tj/dj (Reuters, dpa, AFP, AP)