Nord Stream: EC initiative ‘entirely unnecessary’

Nord Stream 2, the Gazprom-controlled operator of the planned Nord Stream 2 gas pipeline in the Baltic Sea, has criticized the European Commissions request for mandate to negotiate with Russia an agreement on the project.

The European Commission on Friday adopted a request to the Council of the European Union for a mandate to negotiate with the Russian Federation the key principles for the operation of the Nord Stream 2 gas pipeline project.

The Commission said it sought „to ensure that, if built, Nord Stream 2 operates in a transparent and non-discriminatory way with an appropriate degree of regulatory oversight, in line with key principles of international and EU energy law.“

It has been planned that the 1,220-kilometer pipeline will be able to transport a total capacity of 55 billion cubic meters of natural gas a year. It will run from the coast of Russia via the Baltic Sea to Greifswald in Germany, carrying Russian gas to the EU consumers.

Commenting on the EC request, Vice-President for Energy Union Maroš Šefčovič said: “Creating a well-diversified and competitive gas market is a priority of the EU’s energy security and Energy Union strategy. As we have stated already several times, Nord Stream 2 does not contribute to the Energy Union’s objectives. If the pipeline is nevertheless built, the least we have to do is to make sure that it will be operated in a transparent manner and in line with the main EU energy market rules.”

Commissioner for Climate Action and Energy Miguel Arias Cañete said: “As any other infrastructure project in the EU, Nord Stream 2 cannot and should not operate in a legal void or according to a third country’s energy laws only. We are seeking to obtain a Council mandate to negotiate with Russia a specific regime which will apply key principles of EU energy law to Nord Stream 2 to preserve the functioning of the European internal energy market”.

‘No need for this’

Responding to the EC request Sebastian Sass, EU Representative Nord Stream 2 AG said “Nord Stream 2 believes that this initiative is entirely unnecessary. The German regulator already confirmed that there is no legal void that needs to be addressed. Our permitting procedures have been launched successfully and are being conducted by the competent authorities in full compliance with all applicable laws. As part of these procedures, Nord Stream 2 is now actively engaging in open and transparent consultations with stakeholders in all countries around the Baltic Sea.”

The company said that the European Commission seeks a “special legal framework” that would be applied only to Nord Stream 2 and not to any of the six comparable import pipelines that exist or are planned for transporting gas to the EU from outside the internal market.

“A specific framework just for Nord Stream 2 would discriminate against an individual commercial investment, based on political sentiment. It is unacceptable that among other comparable pipeline projects the European Commission, as the guardian of the EU Treaties, has singled out Nord Stream 2 for a special political treatment. This infringes against the principle of equal treatment, which is a constituting element of the EU Founding Treaties,” Nord Stream AG said.

Furthermore, the company said the Nord Stream 2 project is subject to a comprehensive legal framework based on EU law, international conventions, and national legislation of the countries along the route of the pipeline.

“In Europe, there are six comparable import pipelines that are subject to the same legal regime. The principle of equal treatment is a constituent element of EU law. A “special legal framework” for only one pipeline would infringe upon this fundamental principle. The German regulator Bundesnetzagentur has duly informed the Commission of the risk of a “discriminatory practice” associated with unequal application of legal requirements.

“Gas fields in Western Europe are depleting rapidly, while gas consumption in the EU is expected to remain stable for the next decades. Within the next 20 years, gas production in the EU will drop by around 50%. Even when running at full capacity all the time, Nord Stream 2 will only cover around half of the additional volumes needed by European consumers by 2035. It is therefore wrong to assume that Nord Stream 2 will replace the Ukrainian or any other existing transport route.”

Nord Stream also highlighted the fact that five leading Western European energy companies from Germany, Austria, France, and the Netherlands have already committed to providing long-term financing for up to 50 % of the total cost of the project, which is estimated to be €9.5 billion.

Offshore Energy Today Staff

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