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02/12/2016

EU to rule on Gazprom pipeline link to Germany by 31 October

Energy

EU to rule on Gazprom pipeline link to Germany by 31 October

Margrethe Vestager [European Commission]

The European Union will decide by Monday whether to ease restrictions on Russia’s access to a gas pipeline link to Germany, two people close to the issue said yesterday (25 October).

Together with separate talks to settle an antitrust case against Russian state gas exporter Gazprom, the decision could go a long way to smoothing ties between the EU and Russia, which supplies around one-third of the bloc’s gas.

Vestager: Commission ready to move forward with Gazprom probe

Competition Commissioner Margrethe Vestager said that despite the Ukraine crisis, she will move forward with the two-and-a half year long probe into Gazprom.

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But with diplomatic ties strained over Syria and Ukraine, some former Soviet EU members see the deal-making with Moscow as a failure by Europe to loosen Russia’s grip over energy sectors in a region where gas prices can make or break governments.

EU antitrust regulators are due to meet with Gazprom in Brussels on Wednesday. Two weeks ago, the parties were nearing a deal to settle EU concerns that Gazprom overcharged customers and blocked rivals in eastern and central Europe with anti-competitive business practices.

The heads of the European Commission discussed the pipeline issue yesterday but a spokeswoman said they had not yet taken a decision, but that it “will happen in due course.”

EU rules designed to promote competition currently cap Gazprom’s use of the Opal pipeline, that links Russia’s Nord Stream pipeline to Germany and the Czech Republic, at half the line’s capacity.

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

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).

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Full access to Opal is vital to Gazprom’s plan to double capacity of the pipeline in a project known as Nord Stream 2 and bypass Ukraine as a route for gas supplies to Europe.

Sefcovic sheds light on Nord Stream 2 negotiations

Speaking to a group of journalists yesterday (19 April), Commission Vice-President Maroš Šefčovič, in charge of the Energy Union, shed light on the ongoing negotiations to reconcile the Nord Stream 2 pipeline project with EU legislation.

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The plan has bitterly divided the European Union, and a decisions to allow Russia to pump more gas via Opal risks angering eastern European EU members worried about Russian energy dominance.

Tusk joins ‘Visegrad Four’ in attack on Nord Stream 2

The ‘Visegrad Four’ countries (Poland, Czech Republic, Slovakia and Hungary) found a powerful ally at the EU summit which ended today (18 December) in the person of Council President Donald Tusk, who repeated most of their arguments against the Germany-favoured project.

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The Commission will issue its decision on Friday or by 31 October, the sources said, after Wednesday’s meeting between Gazprom Deputy Head Alexander Medvedev, Russia’s Deputy Energy Minister Anatoly Yanovsky and European Competition Commissioner Margrethe Vestager in Brussels.

“(Wednesday’s) meeting is absolutely key, and can change the whole game,” one EU source said.

A decision has been delayed since talks collapsed in 2014, after Russia’s annexation of Crimea and backing for rebels in eastern Ukraine.

Clearing the legal hurdle would help pave the way for Nord Stream 2, which Poland and seven other EU nations oppose, saying it would deprive Kyiv of transit fees and harm energy security.

Germany seeks to overcome opposition to Nord Stream 2

A new pipeline to double Russian gas flows to Germany will only go ahead if Russia does not cut off gas flows to Ukraine and eastern Europe, German Vice Chancellor Sigmar Gabriel told the Polish government on 29 January.

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“By supporting Nord Stream 2, the EU in effect gives succour to a regime whose aggression it seeks to punish through sanctions. This contradiction is unsustainable,” Poland’s Minister for European Affairs Konrad Szymanski wrote in the Financial Times on Monday.

Even if a deal on Opal is reached, Katja Yafimava of the Oxford Institute for Energy Studies said EU concerns over approval for Nord Stream 2 are unlikely to fade away.

“For Nord Stream 2, I don’t expect an easy ride in any scenario,” Yafimava said.