Page 5 - FSUOGM Week 35 2021

FSUOGM COMMENTARY FSUOGM

Discrimination claims consumers will be looking forward to this extra
Nord Stream 2 AG has reiterated that it regards supply coming on stream, given the sharp spike
the EU gas directive amendment and the subse- in wholesale gas prices on the continent in recent
quent regulatory ruling in Germany as discrim- months, which have topped $500 per thousand
inatory against the pipeline. cubic meters – prices normally seen in the winter
Indeed, some of the biggest supporters of months and not in the summer.
the amendment among EU member states and The ruling means that Nord Stream 2 will
other countries are also some of the most vocal have to comply with EU unbundling rules,
opponents of Nord Stream 2, such as Poland and which state that a single company cannot own
Ukraine. Both countries fear that the pipeline’s both a pipeline and the gas that flows through it.
launch will result in greater Russian political Whether this means Gazprom will have to divest
influence in the heart of Europe, and the loss of the pipeline is unclear at this stage.
revenues they receive for transiting Russian gas. The Russian company may also have to
The head of Ukraine’s national gas company auction off some of Nord Stream 2’s capacity
Naftogaz, Yury Vitrenko, took to social media to to other companies, and limit its own use of the
praise the court ruling. pipeline's 55 bcm per year of capacity. Russian
“It will be a hard battle. The Kremlin has been law states that only Gazprom can export gas
blackmailing Europe with gas shortages in the via pipeline, and this is unlikely to change as
winter period,” he said. “Some Western govern- Moscow wants to avoid competition between
ment officials don’t want to realise or pretend Russian gas suppliers in European markets,
they don’t realise what European rules actually which would drive down its revenues. There-
mean.” fore no companies would be legally able to take
part in the auctions it holds for Nord Stream
What next? 2’s capacity.
Nord Stream 2 AG told NewsBase it was evaluat- But that is exactly the outcome that Ukraine
ing the court’s decision and would announce its is hoping for. Sergiy Makogon, CEO of GTSOU,
next steps at a later stage. The company is also in told bne IntelliNews in an exclusive interview
the process of challenging the EU amendment that one of the reasons why Ukraine has stopped
in the Court of Justice of the EU and under the buying gas from Russia and switched instead to
Energy Charter Treaty, it said. importing it from its EU neighbours to the west
These efforts will take time, however. And the is that because of the lack of competition, Gaz-
ruling likely means there are no legal grounds prom can set any price it likes for Russian gas.
for Nord Stream 2 AG to be certified as an inde- While on paper the Western-sourced gas is
pendent transmission operator in Germany. more expensive than Russian gas, in practice
Certification is a necessary step for the pipeline the prices are the same, as Gazprom can set the
to start flowing gas, and without a certificate price. If other Russian gas producing companies
delays are possible. were given access to the export pipelines then
Naftogaz’s Vitrenko, who is a staunch enemy the competition between them – and several of
of the pipeline and who did most of the leg work the Russian gas producers are privately owned
in the battle against Gazprom in the Stockholm – should drive prices down. Opening up Nord
arbitration court that led to a multi-billion award Stream 2 to Russian competition could force the
against Russia paid to Ukraine over past gas unwanted competition on Gazprom and change
payments, said on social media on August 25 he the calculus of buying gas from Russia, accord-
believed the pipeline would not get certification ing to Makogon.
and so could be used despite being physically At the same time, halving Gazprom’s access
complete. to Nord Stream 2 would also mean that Russia
Gazprom recently said it expected Nord has insufficient pipeline capacity to meet EU
Stream 2 to be up and running by mid-October demand and contracts for gas without contin-
and flow as much as 5.6bn cubic metres of natu- uing to export some gas via Ukraine’s pipeline
ral gas by the end of the year. Many European gas system. ™

Week 35 01•September•2021 www. NEWSBASE .com P5