The European Commission has approved the proposal to extend the requirements of the Third energy package on all the pipelines of third countries, including Nord stream-2. The decision also notes that the construction of the pipeline is not necessary for Europe. Moreover, the EC in its decision, stressed that he would continue to support the preservation of the transit of Russian gas through Ukraine.

WHERE TO START. The gas pipeline Nord stream-2, connecting the Baltic coast of the Russian Federation and Germany plans to build Nord Stream AG 2, controlled by Gazprom. In the project are also interested European company, OMV, BASF, Engie, Shell and Uniper. Scheduled completion date is 2019, the capacity is 55 billion cubic meters. In the case of the project, Ukraine could lose $2.7 billion of transit revenues a year (3% GDP).

Opponents of the construction in addition to Ukraine were made by Poland, Estonia, Latvia, Lithuania and, partly, Denmark. The preliminary position of the EU was to ensure that the activities of the Nord stream-2 should be governed by European law and not to impede the diversification of routes of gas supplies to Europe.

Photos iStock/Global Images Ukraine

WHAT HAPPENED. The European Commission adopted a decision on what to pipelines built by non-member countries in the EU should be subject to the rules of the Third energy package. Namely, one company cannot simultaneously be the supplier and transiter of gas.

“Nord stream-2 can be implemented in a legal vacuum, or only in accordance with the legislation of a third country. If it is built, the pipeline requires legal frameworks that integrate key principles of the rules of the energy market of the EU”, – stated in the message of the EC.

That is, 2 Nord Stream AG will have to pay managing the pipeline of any European company, or (probably) their consortium. As tradeoffs are considered and that infrastructure activities Nord stream-2 be for 2 Nord Stream AG, but to supervise its operation will be independent of the regulator. In addition, the need to provide access to the pipeline third-party companies.

See also: Hybrid tube. As Nord stream-2 quarreled EU countries and the USA

Which is especially painful for Gazprom: the European Commission, which is questioning the need for the construction of the pipeline. “Gas imports to the EU are expected to remain stable to 2030 due to declining domestic production and consumption. Because of the existence of a well-developed infrastructure for gas imports and the expected competitiveness of LNG after 2020, the European Commission sees no need for new infrastructure of this magnitude, as Nord stream-2”, – said the EC.

For Ukraine, the most important point of the decision of the European Commission reads: “the EU continues to support the transit of Russian gas through Ukraine.”

Photos iStock/Global Images Ukraine

WHAT DOES IT MEAN. The European Commission’s decision still must be approved by the European Council and the European Parliament. So that the main political battles over the fate of Northern flow-2 is still ahead. Given that Gazprom only in the United States has spent nearly $1 million in order to lobby for a favorable decision for the project of the American authorities, the fight will be hard.

The head of Naftogaz Andrey Kobelev cautiously optimistic: “This decision is progress in the right direction. In the text there are many potential “holes” that can be used by our opponents (read: “Pro-Russian lobby”), but it opens the way to public discussion of the project Nord stream-2 at a high political level in the EU.”

Just business. Nord stream ran into a “package”. What does it mean 08.11.2017

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