Gazprom’s horrible year just got worse.

On Friday, the German energy regulator denied an application from the Nord Stream 2 pipeline — wholly owned by Gazprom — for a 10-year derogation from complying with EU gas rules.

It’s just the latest in a long run of bad news for the Russian gas giant.

In December, Gazprom had to fork out over $2.9 billion to Ukraine’s Naftogaz, the remaining amount in the $5 billion it was ordered to pay over longstanding transit disagreements; a November appeal by the Russian company was denied by a Swedish appeals court.

In March, it lost another arbitration dispute against Poland’s gas utility PGNiG that will cost it $1.5 billion.

It’s also being hammered by falling energy demand thanks to the coronavirus pandemic. 

Russian pipeline sales into Europe were down 23 percent in the first quarter compared to the same period last year, and the trend has largely continued into the second quarter as buyers order the absolute minimum their contracts will allow, according to Michael Stoppard, chief global gas strategist for IHS Markit.

“Gazprom was already up against quite a lot of difficulty this year given the global oversupply, mild winter, coronavirus demand destruction and massive storage stocks, but we’ve been forecasting for some time that Russian exports to Europe would be significantly down year-on-year,” said James Huckstepp, European gas analyst for S&P Global Platts, adding that Gazprom expects a 20 percent reduction this year.

The shift is leaving an opening for rival liquefied natural gas, potentially undermining the longstanding trend of Russian gas accounting for over 40 percent of Europe’s supply.

A senior EU regulatory official noted that the bloc’s LNG terminals are currently only used at 25 percent capacity. With increased market integration and diversified sources, the most recent security of supply scenario simulations conducted by the European Network of Transmission System Operators for Gas show that Russia doesn’t have the same market power as five years ago.

“If Russia stopped flowing gas through Ukraine tomorrow, most companies, they could deal with it,” the official said. “It’s not such a big issue anymore.”

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Nord Stream 2 adds to those headaches, and the pipeline still isn’t finished.

Just before Christmas, Swiss-Dutch offshore company Allseas announced it would pull its pipe-laying vessels from the remaining 150 kilometers of the 1,200-kilometer project over fear of being hit with U.S. sanctions.

Russian President Vladimir Putin insisted his country could finish Nord Stream 2 alone, and Gazprom duly sailed its best pipe-laying vessel, the Akademik Cherskiy, from the Sea of Japan to the Baltic Sea.

But now the American threats are being directed at Gazprom.

U.S. Senator Ted Cruz tweeted Thursday: “The sanctions on Nord Stream 2 were endorsed by the entire U.S. government and there is absolutely no wiggle room. If Gazprom uses the Akademik Cherskiy to finish the Nord Stream 2 pipeline, [President Donald Trump] must and will impose crippling sanctions on Gazprom.”

Those sanctions could hit Gazprom’s executives, preventing them from traveling to the U.S. and the company could lose access to any property in the country.

None of this is to say that Gazprom is down and out.

S&P Global Platts said that sanctions aside, it still expects construction of Nord Stream 2 to finish on time and begin flowing gas by early 2021. It called the German regulator’s denial of a derogation from EU gas rules “an annoyance,” but pointed out several workarounds that could allow it to still do business in Europe, albeit at higher cost.

“For Gazprom 2020 is going to go down as a difficult year, but it’s not going anywhere despite these hurdles,” Huckstepp said.

The company last year reported a $16.3 billion net profit. It also signed deals in Bangladesh and got its first pipeline to China online, the Power of Siberia, with a contract to deliver 38 billion cubic meters of natural gas each year until 2050.

Sales though the new Turkstream pipeline began January 1, and before the month was over a billion cubic meters of natural gas had been delivered to Turkey and the Bulgarian border.

“In the medium term Gazprom will maintain its market share, and Europe will still be very much depending on Russian gas over the next five years,” Huckstepp said.