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28/09/2016

EU, Russia reach ‘political’ deal on OPAL gas pipeline: sources

Energy

EU, Russia reach ‘political’ deal on OPAL gas pipeline: sources

OPAL pipeline.jpg

EU and Russia have agreed a deal on the use of Germany's OPAL link to Gazprom's Nord Stream gas pipeline, a Russian energy ministry spokeswoman said yesterday (16 September).

No one from the European Commission, the EU executive, was available for immediate comment on the deal, which ends months of talks on OPAL, which runs from the offshore section of Nord Stream through Germany to the Czech border (see background).

A deal could help to ease tensions between Russia and the EU, although the bigger issue of the European Commission's competition investigation into Gazprom remains unresolved.

"The ministry and the EU have reached an agreement on the OPAL pipeline. The agreement is to the satisfaction of both sides. They aim to sign the deal by the end of October," a Russian spokeswoman said.

Two EU sources, speaking on condition of anonymity, said a working party meeting had reached a political deal, which still needed legal endorsement.

Neither the Russian ministry nor the EU sources disclosed details and would not say whether Russia was getting the full access to the pipeline that it had been demanding.

Relations between Russia and the EU have been soured by Brussels' efforts to introduce more competition to the energy market and reduce Russian dominance of the bloc's gas supplies.

Gazprom's access to the 470-kilometre OPAL pipeline has been limited because of the EU's Third Energy Package legislation, which aims to prevent firms that already dominate supply from also controlling distribution networks. 

Background

The Nord Stream twin pipeline system brings Siberian gas directly to Germany under the Baltic Sea, bypassing Ukraine or Belarus. The two 1,224-kilometre offshore pipelines are the most direct connection between the vast gas reserves in Russia and energy markets in the EU.

The pipeline was awarded its final building permit on 12 February 2010.  Construction of Line 1 began in April 2010, and was completed in June 2011. Transportation of gas through Line 1 began in mid November 2011. Construction of Line 2, which runs parallel to Line 1, began in May 2011 and it was completed in April 2012. Gas transport through the second line began in October 2012.

Nord Stream is designed to transport up to 55 billion cubic metres of gas per year, enough to supply more than 25 million households. 

Nord Steam is a joint project of four major companies: Gazprom, BASF/Wintershall Holding AG, E.ON Ruhrgas AG and N.V. Nederlandse Gasunie. Gazprom leads the consortium with a 51% stake. 

The pan-European nature of the pipeline is underscored by its status as a project under the EU's Trans-European Networks energy guidelines.