Page 6 - Euroil Week 45 2019

EurOil COMMENTARY EurOil
Germany protects
Nord Stream 2 from
EU gas laws
Germany has ringfenced the pipeline from changes to the EU gas directive that could stop Gazprom from using all of its capacity
GERMANY
Poland’s regulator is also challenging the financing of Nord Stream 2.
GERMANY’S Bundestag parliament passed a bill on November 14 that will shield the controversial Nord Stream 2 gas pipeline pro- ject from recent amendments to the EU’s gas directive.
The amendments, approved in April, impose EU rules on third-party access, ownership unbundling, non-discriminatory tariffs and transparency on pipelines entering the bloc from third countries, potentially preventing Nord Stream 2 from operating at its full 55bn cubic metre per year capacity.
Germany’s CDU/CSU-led government drafted a law classifiying Nord Stream 2 as a completed project, exempting it from the amendments. It failed to get the bill passed in a nighttime vote on November 8, but was successful in a second vote on November 14.
Earlier this month Ukraine threatened legal action against Germany if it sought to protect Nord Stream 2 from EU energy legislation.
“Such a decision would be in breach of that of the European Commission and German obliga- tions and will definitely be challenged,” Ukraine’s deputy minister for trade and economic develop- ment, Taras Kachka, told Ukrainian media. “The challenge may be filed by us or Poland or any other country.” Nord Stream 2 cleared its main obstacle late last month, when Denmark finally gave the go-ahead for Russia’s Gazprom to build the pipeline through its waters – the last coun- try on the route between Russia and Germany to grant construction permits. But Gazprom no longer has enough time to finish the pipeline by year-end as planned, meaning it will have to pump more gas via Ukraine.
The project faces other challenges – not least a September ruling by the EU’s Court of Justice that imposed a 50% cap on Gazprom’s use of the 36 bcm per year OPAL pipeline in Germany, limiting future gas flows via Nord Stream 2. Gaz- prom is yet to say whether it will appeal against the decision.
Poland’s antitrust agency UOKiK also said
last week it had issued a EUR40mn ($44mn) France’s Engie, one of five European gas firms helping finance Nord Stream 2, as part of pro- ceedings against Gazprom. Engie refused to provide documents and information about agreements it signed with the Russian company, UOKiK said.
“The company has stubbornly and in an unjustified way refused to give us the docu- ments and materials we demanded,” UOKiK’s deputy head Michal Holeksa said in a state- ment. “It caused a significant delay in our actions regarding the financing of Nord Stream 2.” The Polish agency is investigating the financing of Nord Stream 2, which carries a EUR11bn ($12bn) price tag, for breaches in competition law. Gazprom, Engie, Germany’s Uniper and Wintershall, Austria’s OMV and Shell initially intended to set up a consortium to fund and operate the project, but this plan was blocked by UOKiK. Gazprom’s European partners later agreed to provide support in the form of loans instead.
Poland has been a vocal critic of Nord Stream 2, denouncing the project as a geopolitical tool of Moscow that will undermine EU energy security.
Meanwhile, Europe is still waiting for clarity on exactly when Nord Stream 2 will begin flow- ing gas.™
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w w w . N E W S B A S E . c o m Week 45 14•November•2019