(Bloomberg) -- The start of Russia’s controversial Nord Stream 2 gas pipeline faces a new hurdle after Germany suspended a key step in the approval process.

Germany’s energy regulator halted the certification process necessary before the new link between Russia to Germany can start operating, according to a statement on Wednesday. The move comes as Nord Stream 2 AG, the operator of the pipeline, decided to set up a German subsidiary in a bid to meet European Union requirements. 

The announcement sent benchmark European gas prices surging as much as 12% as traders feared the decision could further delay the start of the pipeline’s operations. Europe is facing an energy crunch, having started the winter season with the lowest stockpiles in more than a decade, leaving the regional vulnerable when cold spells hit. 

The certification process remains suspended until the transfer of the essential assets and human resources to the subsidiary has been completed. If these requirements are met, the regulator can continue its examination within the remainder of the four-month period provided by law. 

“Our company undertakes this step to ensure compliance with applicable rules and regulations,” Nord Stream 2 AG said in response to Bloomberg questions. “We are not in the position to comment on details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations.”

The construction of the controversial undersea gas pipeline, that can deliver as much as 55 billion cubic meters of Russian gas to Germany, was completed earlier this year and Nord Stream 2 AG has been waiting for the certification of the independent pipeline operator to start gas deliveries to Germany in compliance with European energy rules.

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