Handelsblatt (Germany): the “Nord stream -2” will be subject to EU gas Directive

The Federal network Agency of Germany (BNA) deny the request “Nord stream 2” AG (Nord Stream AG, 2) for liberation of the Baltic pipeline “Nord stream — 2” from the requirements of the updated EU gas Directive. This stems from the draft decision that BNA sent on Friday to all stakeholders for review. The text of the decision available to the newspaper “Handelsblatt”.

The grounds for refusal was the fact that the company “Nord stream 2” AG has not completed the construction of the pipeline and thereby has not fulfilled the requirements of the law “On power sector”, exemption from the requirements of the gas Directive.

For a project this is a serious blow. “Nord stream 2” AG, which belongs 100% to the Russian concern Gazprom, in the beginning of 2020 has applied for the release of the gas pipeline “Nord stream — 2” from the requirements of the EU gas Directive.

In principle, the possibility of such a release provides updated last year by the Directive of the internal gas market of the EU. The application must be submitted to the regulatory Agency of the state of the EU, in the territorial waters of which the pipeline ends. The pipeline starts in Russia and ends at the Baltic coast of Germany.

Exemption may be granted only to those pipelines, the construction of which was completed by may 2019. The construction of “Nord stream — 2” by may of last year has not been completed. However, the “Nord stream” AG argues that the term “completion” cannot be viewed narrowly.

From the point of view of “Nord stream AG 2” it is a mistake to consider the end only in the technical sense. The company believes it is more important to consider the fact that at the time of entry into force of the new Directive have already been made billions of investments in accordance with the former legal regime.

BNA refers to the new law “On energy sector”

But these arguments BNA rejects. They believe that should be based on all of the construction and technical understanding of the term “completion”. But the “economic-functional understanding” here is inappropriate — it is spoken in the draft decision by the energy regulatory authority.

Until the reform of the Directive on internal gas market the Directive applied only to those pipelines that begin and end within the EU. The reform was initiated by the European Commission and several Eastern European EU member States who are critical towards the gas pipeline “Nord stream — 2”. The reform has led in Germany to the change of the law “On power sector”, which refers BNA in justifying its decision.

If the principles of European network regulation will be applied to the “Nord stream — 2”, in the German territorial waters of the Baltic sea gas pipeline operators will be required to provide access to it and to third countries, in addition the fee for use of the pipeline will be monitored by the regulatory Agency of Germany. More stringent requirements relate to decartelization: the gas producer and the operator of the segment of the pipeline in German territorial waters can not be one and the same person.

Participants in the process expect the “Nord stream 2” AG will appeal the decision to the Higher regional court of düsseldorf. It is possible that the court of Dusseldorf will hand over the issue to the European court of justice. The official representative of the BNA confirmed in response to the query “Handelsblatt” that the draft decision sent to all participants of the process for review.

The Agency plans after the end of the hearings to make a decision quickly. From the range of stakeholders it became known that hearings will be completed by may 8, 2020.