German regulator admits Ukraine as part of Nord Stream 2 certification process

Executive Director of NJSC Naftogaz of Ukraine Yuriy Vitrenko in a file photo dated 21 December 2019. [EPA-EFE/STEPAN FRANKO]

Germany’s energy regulator BNetzA said on Monday (15 November) that the Ukrainian gas companies Naftogaz and GTSOU will be included in the ongoing German certification procedures of the Nord Stream 2 gas pipeline for which they have applied.

“The Bundesnetzagentur (Federal Network Agency or BNetzA) can confirm that it has invited the National Joint Stock Company Naftogaz of Ukraine and LLC Gas Transmission System Operator (GTSOU) of Ukraine to the certification process today,” it said in a statement after an enquiry.

On 20 October, Ukraine’s Naftogaz submitted a request to the German energy regulator Bundesnetzagentur (BNetzA) to take part in the Nord Stream 2 AG certification procedure.

The German certification process began on 8 September 2021, following the acceptance of an application by Nord Stream 2. The agency has four months, until 8 January 2022, to reach a draft decision on the NS2AG certification.

Thereafter, the European Commission has between two and four months to review the German decision and make its own recommendations which BNetzA is obliged to comply with.

Ukraine says that the company NS2AG that has built Nord Stream 2 – an entity wholly owned by Gazprom – cannot and must not be certified as an independent operator, as European competition and energy law explicitly prohibits energy suppliers from controlling transit routes.

Ukraine struggles to make its voice heard in Nord Stream 2 certification

Ukraine is trying to make its voice heard in the certification on the Nord Stream 2 gas pipelines by the German authorities. However initial statements by Germany’s energy regulator suggest that Berlin does not buy into claims that the pipeline would threaten security of gas supply to Germany and other EU member states.

Risk of ‘perpetual gas crisis’

Sergiy Makogon, Director General of GTSOU, the Gas transmission system operator of Ukraine, told EURACTIV in an exclusive comment that his company welcomed Bundesnetzagentur’s decision.

He also warned: “if Nord Stream 2 AG is certified as an independent operator, Germany and Europe might sleepwalk into a perpetual gas crisis for decades to come”.

According to Makogon, Nord Stream 2 has “no commercial justification but every characteristic of an energy weapon”. He argued that the current gas crunch in Europe was “the direct consequence of deliberate and discretionary decisions by Gazprom not to ship gas through Ukraine”.

In a press release, GTSOU argues that the certification of Nord Stream 2 would undermine the rule of law in Europe.

“Certification will only allow Gazprom to more easily use gas supplies as a political tool against Germany and Europe,” according to the Ukrainian gas transport company. “Nord Stream 2 distorts competition with other transit routes, particularly the Ukrainian GTS and the Yamal pipeline through Poland. It denies other suppliers, notably from Central Asia, access to the gas transmission network to reach the EU, and thus undercuts the EU’s efforts to diversify its energy imports and foster competition in the energy sector,” it added.

Naftogaz CEO Yuriy Vitrenko also welcomed BNetzA’s decision. “Our view remains: the Nord Stream 2 pipeline operator cannot be certified unless it complies with all requirements of EU competition and energy law. There can be no special treatment for Gazprom,” Vitrenko said.

He argued that the Nord Stream 2 pipeline was endangering security of supply in Germany and in Europe.

“It is anti-competitive, and will not provide necessary additional gas transportation capacity neither to Germany nor to Europe. More than enough excess transit capacity exists today, but is not being used by Gazprom in its existing contracts with Ukraine’s Gas Transmission System Operator. We see no justifiable commercial purpose for Nord Stream 2,” Vitrenko said in a statement.

Europe's gas supply squeeze engineered by Russia, Poland says

Statements from Russian officials linking an increase of gas deliveries to Europe with the completion of the Nord Stream 2 pipeline are “manipulative” and aimed at cementing Gazprom’s dominant position on the EU gas market, Poland has argued in a letter to the European Commission.

Ukraine takes the view that without further transit of Russian gas via its territory, the Kremlin would more easily take the risk of seizing more Ukrainian territory.

[Edited by Frédéric Simon]

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