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construction might only start if a firm gas supply agreement with China is signed, which would be positive for Gazprom's fundamentals. We note that the project, if finally approved and implemented, would generate cash flows beyond the forecast period in our model. We therefore consider the project to be a longer term prospect for the company, so do not expect any stock price reaction to the news.
German energy regulator Bundesnetzagentur has denied Russia’s Nord Stream 2 gas pipeline a waiver from EU energy rules​, marking another setback for the divisive project. The decision means that Russian state gas company Gazprom will have to cede control of the pipeline, ensure that third parties can access its capacity and set transparent tariffs. The EU introduced an amendment to its gas legislation last year, extending EU energy law to pipelines running between the bloc and third-party countries such as Russia. The amendments only apply to projects completed after the amendment came into force on May 23, 2019.
Nord Stream 2 AG, operator of the Nord Stream 2 project, does not rule out filing an appeal ​against the decision of the Federal Network Agency of Germany, which refused to remove the gas pipeline from the scope of restrictions established by the EU Gas Directive, a spokesperson with Nord Stream 2 AG told TASS. “We expect reception of a formal decision, then we will assess it and consider further steps to protect our rights, including appealing this decision in German courts. An appeal is possible within one month after the decision is made,” the spokesperson said. The official also stressed that the rejection of the Nord Stream 2 application shows the discriminatory effect of the amended EU Gas Directive. However, the decision will not affect the completion of the pipeline, the official added.
Russia’s crude oil production will go down by around 10% in 2020 ​due to OPEC+ restrictions compared with 2019 when it reached the record 560.2mn tonnes, Energy Minister Alexander Novak said at a meeting on energy development issues headed by President Vladimir Putin on Wednesday. "Currently companies are preparing for cutting production. In May, the reduction will amount to roughly 19% compared with the level of February 2020. Considering the work of first four months and a gradual decrease in reduction volumes, output volumes are planned to be reduced by around 10% by the end of the year compared with last year," he said.
9.1.2 ​Automotive sector news
The Russian government will allocate RUB25bn to support the car industry​, including RUB5bn to acquire ambulance cars, Prime Minister Mikhail Mishustin said at a government meeting on May 22. The funds will be also used for beneficial lending and leasing, and for advance purchases of Russia-made cars for parastatal companies.
Car sales in Russia in 2020 amid the coronavirus pandemic and lower oil prices could fall by 30% to 1.14mn cars​, according to a study by consulting company PwC.The forecast was based on a "stressful" scenario, according to, which the restoration and stabilization of oil prices is expected by the Q3 of 2020, and the removal of most of the restrictions on the movement and activities of enterprises - in late spring or early summer. At the same time, online car sales will actively develop in Russia. Excluding stress factors, the
96​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com