How will the European Commission address Gazprom's Nord Stream 2?

  • Elisabeth Gheorghe
  • 16.3.2017 09:51

The EU’s Committee on Industry, Research and Energy (ITRE) appealed to Malta, that currently holds the EU Council presidency, requesting a debate on the European Commission’s stance concerning Nord Stream II’s position vis-à-vis EU energy legislation.

Highlighting doubts revolving the pipeline’s compliance with EU regulation, the chief objection concerns anti-competition. Conversely, the EC underlines Nord Stream’s role in diversifying European gas supplies, by boosting OPAL’s capacity. The EC’s 2009 approval denoted an ancillary annual output of 3bn m3. Another matter tackles Central European gas consumption, as Czech appetite has for instance reportedly fallen between 2008 and 2012. The Nord Stream debate continues to remain a novelty in the ways in which the EC’s formal evaluation has been conducted.

Investors formally filed an application, in effort to support the pipeline's naissance, in 2015. Assuming no objection from Polish regulators, another bid was submitted by six entities – namely, Gazprom (Russia), E.ON (Germany), Engi SA (France), OMV Nord Stream II (Switzerland), and Dutch-owned Shell and Wintershall Nederland BV – in anticipation of enacting the project. Polish regulators shortly discovered that Gazprom could override the Polish gas market, reducing long-term market competition, whilst accordingly fortifying its role in Europe, a move that has stirred disapproval from transit states Belarus and Ukraine.

The Consortium formally withdrew its application, following Polish regulators’ August 2016 ruling. Due to financial trepidations, the Consortium’s European parties chose to individually renegotiate with Gazprom, delaying the project by a year. Nord Stream is a lucrative opportunity for European firms, bolstering present and future Russo-German business ties, with Austrian OMV considering the move as an embellishment. Gazprom has however successfully gleaned investment interest, notwithstanding its mêlées to instigate underwater work.

Mirroring national regulators’ judgments, ITRE ultimately pronounces the Nord Stream as ‘incompatible’ with existing EU laws and transmission procedures. The EC, they contend, should instead shield EU economic interests, by funding sustainable and independent alternatives. With concerns regarding energy solidarity and mounting anti-EU sentiments, the question remains whether the endeavour receives an approval.

About author: Elisabeth Gheorghe

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