Nord stream 2, other disputes fail to dent russian natural gas flows to eu – the barrel blog gas under a dollar


But state-owned Polish gas company PGNiG gained an interim court order to suspend the decision, causing the interruption in capacity sales from February to July. It has also asked the EU General Court in Luxembourg to annul the decision completely.

The court has said it will rule on this in 2019, and that capacity booked for after this ruling may not be guaranteed. That leaves an element of doubt over Gazprom’s future access to OPAL until the ruling is given. EC BATTLES AGAINST NORD STREAM 2

The latest salvo is the EC’s proposal to apply EU third energy package internal market rules to all offshore gas links with non-EU countries up to the limit of EU countries’ exclusive economic zones, which go beyond their territorial waters.

The proposal as written would cover long-standing links to Algeria, Tunisia and Libya, as well as the Nord Stream 1 pipeline, and any new links such as Nord Stream 2. It would also cover links to the UK after Brexit. But the clue as to the real target is in the option for national authorities to give existing pipelines long-term derogations — meaning protection from the internal energy market requirements for an unspecified time.

EU national energy ministers are looking at allowing those derogations to last for up to 20 years, and be renewable. If agreed — and there is no guarantee that the EC’s proposal will make it into binding EU law at all — this would effectively cover existing pipelines till the end of their operational life, if national authorities so desired.

Ownership unbundling and third-party access would make little difference to Nord Stream 2. Existing vertically integrated companies such as Gazprom are eligible for very lightly supervised separation of their supply and transport arms under EU rules; and Gazprom still has an export monopoly for pipeline gas, so there are no third parties to ask for access.

So the real focus is on transmission tariffs. The EC clearly wants Nord Stream 2’s tariffs to be more transparent, to give Ukraine a fighting chance to compete with them after 2019, when its transit contract with Russia expires. Russia has said that it is willing to consider sending gas through Ukraine if the price is right. The scene is thus set for tense talks on post-2020 transit tariffs.

Meanwhile, the EC’s proposal on offshore gas pipelines is also likely to complicate a long-running WTO case. The WTO panel investigating Russia’s formal complaint that the EU’s third energy package rules discriminate against Russian infrastructure has already delayed its final report several times, saying the issue is highly complex.

One dispute which could progress soon is the EC’s antitrust case against Gazprom’s alleged market abuse in Central and Eastern European countries. The EC is in advanced talks with Gazprom on commitments to resolve the case without a formal judgement, thus avoiding potential fines.

Overall it is clear the EU still wants to buy Russian gas in large volumes, and Russia still wants to sell to the EU. The commercial benefits to both sides continue to drive trade despite the disputes, and these benefits are unlikely to change much in the coming years.