Page 4 - Euroil Week 20 2020

EurOil COMMENTARY EurOil
Germany denies Nord Stream 2
a waiver from EU law
Gazprom’s new pipeline to Europe will have to comply with EU unbundling rules
EUROPE
WHAT:
German regulators have denied Nord Stream 2 a waiver from EU gas law.
WHY:
The decision means the pipeline will have to comply with EU rules on unbundling, transparent tariffs and third-party access.
WHAT NEXT:
Gazprom is likely to seek a creative solution to the setback.
THE EU’s second highest court said on May 20 it had rejected Gazprom’s attempt to get legal changes affecting the Nord Stream 2 pipeline annulled. The ruling, which Gazprom has said it has two months to appeal, could result in the Russian company having to divest the project.
The EU introduced an amendment to its gas directive last year, extending EU energy law to pipelines running between the bloc and third- party countries such as Russia. Germany, which will receive Nord Stream 2’s gas, adopted the amendment in its legislation last year.
The amendment requires pipeline operators to unbundle supply from transmission, endure third-party access to capacity and set transparent tariffs.
The Gazprom-owned Nord Stream 1 and 2 operating companies sought to get the amend- ment annulled at the EU’s general court. Nord Stream 2 argued that the new obligations would require it to sell the 55 bcm per year pipeline or “entirely alter its organisational and business structure,” weakening the project’s investment case.
However, the court has rejected this argu- ment, stating on May 20 that the directive did not directly affect Nord Stream 2 as it was up to Germany to transpose and enforce the legisla- tion. Nord Stream 2 has said it is analysing the
ruling and had two months to submit an appeal. “The court has not rejected our claim on sub- stance, in particular that the amendment of the gas directive constitutes an unlawful discrimina- tion of Nord Stream 2. Therefore, we maintain
our claim,” the operator said.
German ruling
The amendment only applies to projects com- pleted after it came into force on May 23, 2019. Gazprom had been hoping to get a waiver from German energy regulator Bundesnetzagentur, arguing that Nord Stream 2 should be treated as having been finished at this point, as it was already a finalised investment and construction was well underway. But Bundesnetzagentur, consulting with other EU member states, has denied one
“Since the Nord Stream 2 pipeline had not been fully laid by May 23, 2019, the Bundesnet- zagentur has rejected the application for der- ogation made by Nord Stream 2,” it said in a statement on May 15. “When it is put into oper- ation, therefore, Nord Stream 2 will be subject to German regulatory requirements and European rules on unbundling, network access and cost regulation.”
Nord Stream 2 aims to supply Germany and other Gazprom customers in central Europe,
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w w w . N E W S B A S E . c o m Week 20 21•May•2020