Page 4 - FSUOGM Week 35 2021

FSUOGM COMMENTARY FSUOGM

Nord Stream 2 fails to get

exemption from EU gas

market rules

Gazprom has accused the EU of discriminatory legislation

EUROPE A court in Germany has ruled that Russia’s con- appeals court in Duesseldorf, but that court has
troversial Nord Stream 2 pipeline should not now rejected its appeal.
WHAT: be exempt from EU gas market rules, creating
Gazprom’s bid to get Nord a further headache for the project’s state-owned Devil in the detail
Stream 2 excluded from operator Gazprom. The upshot is the Russian gas The amendment to the EU gas directive only
EU energy law has failed. monopolist may be only able to use some of the applies to pipelines that were incomplete as
pipeline's capacity. of May 2019, and this is where the contention
WHY: The ruling could mean Gazprom has to lies. German regulators took that to mean the
Nord Stream 2 will have unbundle the pipeline or even limit how much literal completion of construction, and at that
to abide by rules on gas it sends through it. But while a setback, the time, only just over half of Nord Stream 2 had
unbundling and third- decision will not prevent Nord Stream 2’s immi- been laid. However, Gazprom asserts that Nord
party access. nent completion. Stream 2 should have been counted as com-
The EU introduced an amendment to its gas plete, given it had already committed to the
WHAT NEXT: directive in May 2019 to extend the bloc’s mar- project financially, sinking billions of dollars
The court decision is ket liberalisation rules to pipelines to and from into it.
likely to delay Nord third countries such as Nord Stream 2. It was up “On the effective date of May 23, 2019, the
Stream 2 but will not to the discretion of EU member states connected pipeline was completed from the perspective of
thwart the project. to those pipelines, in this case Germany, to apply economic functionality,” the Gazprom-owned
the rules. And German regulator Bundesnet- Nord Stream 2 AG operating company told
zagentur in May last year chose not to grant the NewsBase. “Based on the applicable legal frame-
Russian pipeline an exemption. work at that time, the company had made invest-
Gazprom challenged this ruling in the Dues- ments worth billions of euros long before the
seldorf Higher Regional Court last year but European Commission announced its plan to
was unsuccessful. It then took the matter to an amend the EU gas directive.

P4 www. NEWSBASE .com Week 35 01•September•2021