The Gas Value Chain Company

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Berlin/Friedrichskoog, February 2021

Wolfgang was interviewed for and quoted in an article titled ‘Letzte Chance für Nord Stream 2 – Berlin und Washington ringen um einen Kompromiss, um die Ostsee-Pipeline doch noch möglich zu machen. Vier Optionen liegen auf dem Tisch.’ (‘Last Chance for Nord Stream 2 – Berlin & Washington explore a compromise in order to see the Baltic-Pipeline completed after all. Four options are on the table.’), by Klaus Stratmann, a German journalist of the leading German business newspaper Handelsblatt.

The article picks up on a report to Congress by Anthony Blinken, secretary of state under the new U.S. administration. The report does not increase the pressure but only mentions 18 companies which have already left the project to avoid U.S. sanctions. While disappointing NS2 opponents of the pipeline, supporters felt encouraged that a face-saving compromise might be possible after all. The article explains and discusses various ‘options’ presently being contemplated, i.a. a so-called ‘snap-back’ mechanism or a temporary construction stop.

Wolfgang explained that already the point of departure, namely alleged dependency on Russia, was false. Thanks to a global gas market with an abundance of destination-flexible LNG responding to price signals and redundant European pipeline- and LNG infrastructure, Europe’s security of gas supply was ascertained even in the event that Russian supplies were, for whatever reason, curtailed.

As to the ‘snap-back’ mechanism, Wolfgang recalled that the European Third Energy Directive had been amended to capture also import pipelines from outside the EU in questionable fashion. Since only affecting Nord Stream2, the amendment is essentially a discriminatory ‘Lex NS2’. Even the ‘Lex NS2’ does not, however, cater for imposing a regime, under which the operations of an individual import pipeline can be turned on and off.

In reality, the ‘snap-back’ mechanism would be nothing less than a ‘mini-embargo’.

If one really felt the urgent need to ‘punish’ Russia (such that it hurts), it would thus not have to be a construction stop or a moratorium, but a European import embargo on large quantities of Russian gas. Ideally, such embargo should be imposed at places, where collateral damage of transit countries (Belarus, Poland, Ukraine) is avoided: Nord Stream 1 and Nord Stream 2.

Ironically, those who cry the loudest to ‘punish’ Russia, should be the ones pushing hard to have the pipeline completed asap:  It would increase the ’leverage’ from 55 bcm/a to 110 bcm/a.

If a gas embargo were imposed, European security of supply would not be affected. But wholesale traded gas market prices would go through the roof. This, however, would allow the purchase of respective quantities of LNG in competition with Asia.

The elevated wholesale traded gas market prices caused by an embargo on Russian gas would have to be borne by the European consumers. On an annual basis this could easily be double digit billions of Euros.

As to a construction stop, Wolfgang explained that Nord Stream 2 as such is only a piece of steel pipe. What matters is the gas that it is carrying. The politicians who so loudly clamor for ‘punishment’ of Russia by stopping completion of the pipeline, conveniently ignore that Russia could book additional transit in Ukraine and continue gas deliveries as before. While also Gazprom would have to write-off its share of the investment, it would not incur a loss of gas revenues. In contrast, the Western companies would incur a non-recoverable write-off loss (almost a billion Euros each), not to speak of the losses incurred by multiple sub-contractors.


Berlin/Friedrichskoog, January 2021

Wolfgang was interviewed for and quoted in an article eventually titled ‘Baltic Pipe – die nächste Ostseeröhre kommt bestimmt’ (Baltic Pipe – the next Baltic Sea pipe will come for sure), by Jan Emendörfer, a German journalist of RND (RedaktionsNetzwerk Deutschland), online available at and published in a multitude of German newspapers. The article picks up on the somewhat astonishing circumstance that Nord Stream 2 is making the news almost daily while the Baltic Pipe appears to be progressing ‘under the radar’. Wolfgang explained that the Baltic Pipe is a 10 bcm/a tee-off of the existing Norwegian Europipe II beaching at Dornum, Germany. After ‘punching a hole’ into the fully utilized Europipe II offshore the Danish coast west of the Jütland peninsula, the Baltic Pipe comes out of the North-Sea, crossing the Jütland peninsula, then into the Baltic Sea towards and across the island Fünen (where a compressor station is erected), thereafter once more into the Baltic Sea towards and across the island Zeeland, and thereafter once more into the Baltic Sea towards the Polish coast. Wolfgang had recommended to title the article ‘Baltic Pipe – a veritable alternative to Nordstream 2 or just a farce?’ where the latter would have been the conclusion of the article. While the proposed title got ‘lost’, thrust (and conclusion) of the article remained: the Baltic Pipe is a farce. Read moreThe Baltic Pipe is only diverting a portion (10 bcm/a) of an already existing gas stream, flowing from Norway to Germany, towards Poland. In contrast, Nord Stream 2 delivers 55 bcm/a thus enhancing European security of supply. Wolfgang pointed out that the environmental impact is essentially the same irrespective of the pipeline size. He reiterated that the Baltic Pipe project is grossly uneconomical. Not only are the economies of scale of a ‘small’ pipeline inferior to those of a large project, thereby increasing the per unit transport costs. Most disturbing however is the fact that the same result could have been achieved by booking entry at Dornum (into the Gaspool hub) and (simultaneous) exit at Frankfurt a.d. Oder/Mallnow for a few cents/MWh, instead of investing >€ 2 billion. The Polish project is thus entirely political, hinging on ‘ideological physicality’ and an alledged but not existing dependency on Russian gas supplies. It is borderline scandalous that the EC fell for the Polish misrepresentations and supports it with triple digit million Euros of taxpayers’ money. Also ‘Zukunft Gas’ stated that the Baltic Pipe would not add to European security of supply and that stronger integration of the Polish market was, not least since large amounts of taxpayers’ money were granted, ‘desirable’. Wolfgang re-iterated his earlier observation that Poland’s aspiration to become a pivotal hub for its eastern neighbors is not a good idea. While Poland (and others) frequently claim that Nord Stream 2 is ‘dividing’ Europe, it is Poland which is divisive: ‘Shutting off to the West and creaming off to the East’ by imposing grossly elevated Polish wholesale gas price levels on its neighbors and depriving them of the benefits of the transnational Northwest-European traded wholesale market is the most divisive behavior one can think of.


London/Friedrichskoog, January 2021

Wolfgang was interviewed for and quoted in an article titled ‘Fortuna favors the bold’ by Diane Pallardy, an energy expert from ICIS, published in ICIS Gas In Focus (GIF 28.02 of 29 January 2021), the leading gas industry report with an established audience of executives, analysts and traders since 1994.

The article analyzes the resumption of pipe-laying for the Nord Stream 2 pipeline by the ‘Fortuna’, after the project had, albeit 94% completed, been stalled by U.S. sanctions. A particular focus is put on the creation of a foundation by the German state Mecklenburg-Vorpommern, aiming to shield municipal as well as private entities from the wrath of illegal U.S. sanctions and individual threats (‘fatal consequences’) e.g. by U.S. senator Ted Cruz to the port of Sassnitz and others, clearly constituting an act of criminal blackmail.

Wolfgang emphasized that the American interference in European energy autonomy in violation of international law was intolerable and so was the inaction of both the German Federal Government and the European Commission. He gave credence to the courageous Ms. Schwesig, governor of Mecklenburg-Vorpommern, as the only one taking counteraction. Hence the title: ‘Fortuna favors the bold’.


Friedrichskoog, December 2020 | Paper by ‘The Gas Value Chain Company GmbH’: ‘UOKiK NS2 Decision: ‘Alternative Facts’ & ‘Sanctimonious Hypocrisy’- UOKiK should clean up the foreclosed Polish market in front of its own doorsteps instead of acting ‘Headmaster’ for the EU’.

The paper analyzes the decision of the Polish ‘Office of Competition and Consumer Protection’ (‘UOKiK’) of 6 October 2020 imposing exorbitant fines on Gazprom and five Western Companies in conjunction with the Nord Stream 2 project. The market facts on which the decision is based are false without exception. Since it is hard to believe that a competition authority is unaware of the true state of the markets, they are qualified as ‘alternative facts’ brought forward to spread politically motivated ‘fake news’.

The ‘alternative facts’ are presented in ‘sanctimonious hypocrisy’ fashion (“… it is astounding that Western Companies fail to understand…”).

While the description of the European gas markets, meanwhile embedded in a global gas market, is simply wrong, the depiction of the Polish gas market is misleadingly false. Poland continues to obstruct integration of its gas market into the Single European Gas Market by multiple ‘non-physical entry barriers’ including anti-competitive practices such as e.g. ‘predatory pricing’. Instead of assuming the role of ‘headmaster’ for the European Union, the UOKiK would thus be better advised to clean up the foreclosed Polish gas market in front of its own doorsteps.

Perhaps most unsettling is the UOKiK’s claim that NS2 is ‘dividing’ Europe. In reality it is Poland working hard to ‘divide’ Europe: By locking up its market to the Northwest-European transnational market and aspiring to become a ‘pivotal hub’ – at the elevated price level prevailing on the Polish market – for its eastern neighbors, it is preventing its eastern neighbors from becoming part of the (almost completed) ‘European Henry Hub’. What else can be more divisive?

The paper has also been published in ‘Natural Gas World’: (


London/Friedrichskoog, October 2020

Wolfgang was interviewed for and quoted in an article titled ‘Pragmatism or indecision?’ by Arlind Neziri, an energy expert from ICIS, published in ICIS Gas In Focus (GIF 27.19 of 30 October 2020), the leading gas industry report with an established audience of executives, analysts and traders since 1994.

The article characterizes Germany’s clean energy strategy as ‘have the cake and eat it, too’ conundrum (‘indecision’?). Namely, counting on renewables both as a source of power generation and production of (green) hydrogen while at the same time phasing out coal and nuclear appears untenable. On the other hand, the support of Nord Stream 2 and LNG terminals indicates potential ‘pragmatism’ with gas stepping in the breach to support decarbonization. The author analyzes the future demand for hydrogen and concludes that electrolyzers fed by excess renewable power only would be uneconomical and small in production output. Wolfgang explained that decarbonized ‘blue’ hydrogen, e.g. from Norway and Russia, will be necessary to accomplish economies of scale and respective cost reduction fast in order to achieve the ambitious decarbonization goals.


London/Friedrichskoog, September 2020

Wolfgang was interviewed for and quoted in an article titled ‘Gas in the time of corona’ by Diane Pallardy, an energy expert from ICIS, published in ICIS Gas In Focus (GIF 27.17 of 30 September 2020), the leading gas industry report with an established audience of executives, analysts and traders since 1994.

The article analyzes the EU’s ambition to use the coronavirus pandemic as an opportunity to accelerate the energy transition, i.a. ending all EU subsidies to fossil fuels by 2025 unless compliant with the so-called taxonomy regulation. Gas might be eligible in member states heavily reliant on coal, lignite, oil and peat, but only where gas infrastructure is already in place, while in regions without gas infrastructure a ‘bigger role’ of renewables is considered. Wolfgang, along with other experts is quoted as saying that a quick demise of gas appears unrealistic. Wolfgang reiterated that, while gas would over time converge towards non-fossil gaseous molecules, the much higher energy density of gaseous molecules vs. electrons would limit any dreams of all-out electrification due to prohibitive costs. The convergence towards non-fossil gaseous molecules would require large scale investments in (blue) hydrogen. The real concern is that ideology, especially in Germany, might be standing in the way: the insistence on ‘green’ hydrogen only might delay the badly needed investments in blue hydrogen in order to achieve economies of scale fast.


Friedrichskoog, April 2020 | Paper by ‘The Gas Value Chain Company GmbH’: ‘Nord Stream 2 caught between politicization, hypocrisy and ignorance: a few inconvenient truths: Both U.S. sanctions and EU regulations obstruct climate efforts and pose risks to security of supply’.

The paper qualifies the U.S. NS2 sanctions as an unacceptable extra-territorial interference in European energy policy and a camouflaged U.S. LNG sales campaign. Moreover, it regards the amendment of the Third Gas Directive a discriminatory ‘Lex NS2’, by which the EC is using regulation as a political weapon. The politicization spawns hypocrisy and reveals ignorance, as a few inconvenient truths illustrate. E.g. continued transit through Ukraine, albeit also carrying molecules of the very same Russian origin, saw strong political support. Also Russian LNG, supplied to Europe in large quantities, is not taken issue with. Russian crude oil is not sanctioned by the U.S. but instead imported in large quantities. Both the sanctions and the ramifications stemming from the amendment of the Third Gas Directive obstruct European climate efforts and pose risks to security of supply. Read moreModern, state-of-the-art infrastructure, i.e. new pipelines and new, energy efficient compressors, such as NS2 features, contribute significantly to reduce the carbon footprint of fossil gas. Even vs. the best LNG alternative (Qatar), 55 bcm/a carried by NS2 would save ~17.1 million tons of CO2equ per annum and ~11 million tons vs. transit through the Ukraine. The tacit ‘optimism’ that NS2 will be completed and operational with only a minor delay poses an unnecessary risk to security of gas supply. The yardstick should be certainty rather than optimism, achievable by removing the sanctions and alleviating the ramifications stemming from the amendment of the Third Gas Directive.