KYIV, Oct 27 – Germany has skipped consultations with Ukraine over Nord Stream 2 before concluding that certification of the submarine Russian natural gas pipeline does not pose any threat to the European energy security.

Germany’s Federal Economy Ministry said Tuesday that granting certification to Nord Stream 2 shouldn’t be considered the threat, suggesting a special German regulatory agency may proceed with the certification process.

The move is a setback for Ukraine, which has claimed for months the pipeline poses an existential threat to the country and may destabilize Europe’s energy security.

“This is bad news,” Serhiy Verlanov, former head of the State Tax Service, said on Wednesday. “It shows the Ukrainian government has failed to make its case, and this doesn’t bode well for surviving the looming energy crisis.”

Although snubbing Ukraine on the issue, Germany has held consultations over Nord Stream 2 certification with other countries, including Estonia, Italy, Latvia, Lithuania, Austria, Poland, Slovakia, the Czech Republic, and Hungary.

Nord Stream 2 has the capacity to shut down Ukraine’s natural gas transportation system, once Europe’s largest, and deprive the country of up to $2 billion per year in revenue from the transit.

Yuriy Vitrenko, the head of Naftogaz, on Wednesday said Nord Stream 2 has several drawbacks that pose a threat to the continental energy security.

"Unlike the Ukrainian gas transportation system, [Nord Stream 2] has no reserve capacity and no storage facilities,” Vitrenko wrote on his Facebook page. “And there are risks associated with militarization and the increase in tension in the Baltic Sea, through which [Nord Stream 2] passes."

Two weeks ago, Verlanov warned investors that Ukraine is facing a “perfect storm” in the energy sector due to the country’s low gas storage levels, liquidity problems at Naftogaz and hardball tactics used by Russian gas giant Gazprom.

In an article published by Seeking Alpha, a U.S. financial news and analysis service, Verlanov argued the government’s controversial reshuffle of Naftogaz leadership in April has undermined the company’s ability to borrow money internationally, causing a slump in gas imports and resulting in low gas storage levels.

Now, with low gas storage levels, with European gas prices at record high and Gazprom potentially shutting down the country’s gas import routes, Ukraine’s energy sector is on the brink of collapse, he said. (tl/ez)