FRANKFURT (Reuters) – German energy regulators on Friday refused to pass EU gas directives to the Nord Stream 2 pipeline operator, giving a new blow to the project to bring gas from Russia to Germany under the Baltic Sea.
Nord Stream 2, designed by Gazprom Russia to increase direct shipments to Europe, is far behind schedule and has faced political opposition from Washington, as well as from Ukraine and Poland through regions where Russian gas is sent to consumers in Western Europe.
The German pipeline regulator, Bundesnetzagentur, said the project was not exempt from EU unbundling rules which require separate operators for energy production, transportation and distribution for parts that cross German territory.
A spokesman for the German Ministry of Economy declined to comment on the decision of the authorities.
Germany’s relations with Moscow have come under pressure after Chancellor Angela Merkel told legislators this week “strong evidence” had been found that Russian agents were behind the 2015 hacking attack on parliament.
Merkel said the attack, in which legislators’ e-mail accounts, including hers, was looted, was part of a Russian attack pattern designed to destabilize the enemy. Russia denies involvement.
The regulator said the Nord Stream 2 consortium – which also includes Uniper, Wintershall-Dea, Royal Dutch Shell, OMV and Engie – did not qualify for the clearance because the pipeline was not completed on May 23, 2019.
Regulatory disputes do not affect ongoing pipeline construction, but can add to operational challenges.
Nord Stream 2 is expected to open around early 2021 after many delays.
A Russian pipe laying ship, Academic Cherskiy, is ready to travel from near Kaliningrad to Bornholm and complete the remaining 160 km (100 miles) after its predecessor Allseas had to leave work due to the threat of U.S. sanctions.
The consortium, which has five Western partners providing 50% of the funds for the pipeline, said that although not physically complete, the project had been functioning economically, with billions of euros of investment being made in good faith.
It is said to have a month to evaluate the decision and consider further action and that the definition that has been completed can be debated as a clash with basic rights in EU law.
Before Germany’s latest decision, they asked the European Court to overturn EU regulations that could prevent it from operating and called for arbitration under an international energy charter that protects investment.
Gas market analyst Wolfgang Peters of the company GasValueChain said Europe needed additional gas at competitive prices, because demand had surged by almost 100 billion cubic meters over the past four years, while supply itself declined.
This volume is roughly equivalent to NS 2 and its predecessor Nord Stream 1, which opened in 2011, combined.
Friday’s ruling could increase fees for the consortium and cause more delays because this implies that he might have to set up a freight company and seek offers from third parties to participate in gas auctions.
Reporting by Vera Eckert, Vladimir Soldatkin, Tom Kaeckenhoff and Thomas Seythal; Editing by Riham Alkousaa, Jan Harvey, Frances Kerry and Barbara Lewis
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