Germany loses OPAL gas pipeline appeal as court sides with Poland

The Opal pipeline links Nord Stream through the territory of Germany to the existing pipeline network in middle and western Europe. [Samuel Bailey, Wikipedia]

Berlin lost its fight on Thursday (15 July) to overturn a ruling limiting Gazprom’s access to the OPAL pipeline, which links the Russian gas producer’s Nord Stream line to the existing pipeline grid in middle and western Europe.

Europe’s top court upheld the ruling, siding with Poland which sees European reliance on Russian gas as a regional security threat and has diversified its own supplies by buying liquefied natural gas (LNG) from the United States and others.

The case is part of long-running dispute over Russian supplies pitting Germany against Poland and other east European states that once lived in the orbit of the former Soviet Union.

The 470-km (292-mile) Opal pipeline, which links Nord Stream 1 with onshore European gas grids, runs from northern Germany to the Czech Republic and has an annual capacity of 36 billion cubic metres of natural gas.

Polish gas firms launched a case against Opal after losing some transit volumes and tariff incomes resulting from the opening of Nord Stream 1 in 2011.

They filed the case in 2016 when Gazprom’s plans to double gas export capacity to Germany via Nord Stream 2 gained pace.

Nord Stream 2, which has a section running under the Baltic Sea, would bypass pipelines running across Ukraine, which has earned valuable transit fees from the business.

Poland, which has said it does not plan to extend a gas supply deal with Gazprom when the existing one expires in 2022, and other eastern European states have been unnerved since Russia annexed Crimea in 2014 in its dispute with Ukraine.

Germany appealed to the Luxembourg-based Court of Justice of the European Union (CJEU) after a lower tribunal in 2019 annulled an EU decision to let Gazprom boost supplies via OPAL.

The lower tribunal’s annulment also followed a Polish challenge to the decision that was made by the European Commission, the European Union’s executive.

In the latest case, the Court of Justice rejected Germany’s arguments that “energy solidarity” was a political concept rather than a legal issue, saying the Commission was required to examine possible risks to security of gas supply to EU markets.

“The legality of any act of the EU institutions falling within the European Union’s energy policy must be assessed in the light of the principle of energy solidarity,” judges said.

The ruling in the case, known as C-848/19 P Germany v Poland, is unlikely to change Gazprom’s flow through OPAL which was already reduced before the court ruled.

Gazprom Export, the export arm of Russia’s state gas company Gazprom, despite not being a direct party in the dispute, said in a statement it regretted Thursday’s court’s ruling.

“We are disappointed by the creation of artificial barriers for an effective usage of investments into the European gas system,” the Russian company said.

OPAL Gastransport, which is based in the German city of Kassel, also said it regretted the court’s decision and said the EU single market was not disadvantaged through the full use of OPAL’s transport capacities.

“A decision on the matter whether Poland was actually damaged by the full use of the OPAL by various shippers was expressly not made,” the firm said.

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