Page 8 - FSUOGM Week 29 2021

FSUOGM COMMENTARY FSUOGM

Germany loses OPAL appeal

The loss will have implications for flow rates via the Nord Stream pipeline for years to come

GERMANY GERMANY has lost an appeal to overturn a strengthens our position in this matter.”
ruling that limits Gazprom’s access to the OPAL Russia’s Gazprom Export, though not
WHAT: pipeline, which in turn restricts how much gas involved in the case, said it regretted the latest
Germany has failed to get the Russian company can flow via the Nord ruling.
a court-mandated limit Stream 1 pipeline. “We are disappointed by the creation of artifi-
on Gazprom's use of the The EU Court of Justice (ECJ) in September 2019 cial barriers for an effective usage of investments
OPAL pipeline overturned. quashed a ruling by the European Commission into the European gas system,” Gazprom Export
in 2016 that granted Gazprom expanded use of said.
WHY: the pipeline, which with a capacity of 36bn cubic OPAL Gastransport, which operates the
The loss means Nord metres per year plays a vital role in distributing pipeline, also expressed regret, saying “a deci-
Stream will continue to gas from Gazprom’s Nord Stream across Ger- sion on the matter whether Poland was actually
flow at below capacity. many and to other Central European states. The damaged by the full use of the OPAL by various
EC had earlier imposed a 50% cap to prevent the shippers was expressly not made.”
WHAT NEXT: Russian exporter from dominating regional sup-
US president Biden ply, in line with EU energy principles. In practice Nord Stream 2
and German chancellor this meant that OPAL was left half empty. Poland, Ukraine and other countries aligned
Merkel are expected to The ECJ’s verdict in 2019 reimposed this cap, against Russia politically will seek to have the
reach a consensus on and Germany has now failed to get the decision same EU rules on third-party access that were
Nord Stream 2 in the near overturned. Instead it sided with Poland, which applied at OPAL extended to Nord Stream 2 as
future. brought up the case after losing some transit well. EU law states that the rules should apply
volumes and tariff incomes as a result of Nord to pipelines coming to and from third countries,
Stream 2’s launch in 2011. unless the affected country, in this case Germany,
By allowing Gazprom to use more of the decides to grant an exemption. German regu-
pipeline’s capacity, the EC acted contrary to the lator Bundesnetzagentur rejected Gazprom’s
principle of energy solidarity and did not take application for an exemption in May last year,
into account the interests of all member states but Berlin could still overrule that decision.
concerned, the ECJ said. Poland’s state-owned The expectation is that Germany’s govern-
gas company PGNiG, which was a party to the ment, a strong supporter of Nord Stream 2, will
case, also said the verdict might have implica- seek consensus first with Washington, which has
tions for Russia’s near-complete Nord Stream 2 long opposed the project. This consensus is likely
pipeline. to involve assurances from Russia that it will con-
“The principle of energy solidarity is funda- tinue transiting gas via Ukraine, continuing to
mental and EU institutions are obliged to apply pay Kyiv billions of dollars in revenues. US Pres-
it when making decisions on energy matters,” ident Joe Biden met with German Chancellor
PGNiG CEO Pawel Majewski commented in Angela Merkel to discuss the issue last week.
a statement. “The ECJ judgment significantly “While I reiterated my concerns about Nord

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