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

A worker turns a tap at the gas-compressor station in Mryn village, about 130 km of Kyiv, Ukraine, in a 2015 file photo. [Roman Pilpey/EPA]

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.

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. Normally the process should last four months.

Germany has four months to certify Nord Stream 2 pipeline

Germany’s energy regulator on Monday (13 September) said it had four months to complete a certification of the Nord Stream 2 gas pipeline after receiving all necessary documents for an application for an operating licence from the pipeline company.

“Our request for intervention is based on our assessment that the Nord Stream 2 project is in breach of EU law,” Yuriy Vitrenko, CEO of Naftogaz, said in a written statement upon submitting the request.

“Nord Stream 2 is designed to increase Europe’s reliance on Russian gas and weaken European energy security and competitive gas markets.”

“German and European institutions now have to determine if Russia will be allowed to push its agenda to the detriment of European business and consumers, or if it will be obligated to operate within the rule of law. The fight to stop Nord Stream 2 is far from being over.”

Naftogaz has relayed the same concerns to the European Commission, which is preparing its own assessment of whether the pipeline complies with EU gas market rules.

In the meantime, the Ukrainian authorities were deeply alarmed by official statements coming from Germany that the pipeline does “not jeopardise the security of gas supply” of Germany and the EU.

German ministry: Nord Stream 2 not a supply security issue

The ministry of economy and energy, led by caretaker minister Peter Altmaier, has completed its long-awaited analysis of the potential impacts of certifying the Gazprom pipeline Nord Stream 2, concluding that the pipeline does “not jeopardise the security of gas …

Despite assurances from outgoing German Chancellor Angela Merkel and other leaders, Ukraine notes that the transit through Ukraine has declined by 70% over 10 months.

Merkel: No Nord Stream 2 without guarantee for Ukraine's gas transit role

German Chancellor Angela Merkel said today (10 April) that plans for a controversial second underwater pipeline to bring gas from Russia could not go forward without Ukrainian involvement in overland transit.

Ukraine’s Minister of Foreign Affairs Dmytro Kuleba said on 27 October his country was “saddened” by the German stance and reiterated that Kyiv would ask its German partners “not to make hasty decisions on Nord Stream 2 without detailed analysis”.

“Our final goal is that Nord Stream 2 applies all standards of the third energy package,” Kuleba said.

Ukraine’s arguments

According to Kyiv, the certification of Nord Stream 2 is a question of whether Russia’s Gazprom, the owner of Nord Stream 2, will be granted a privileged position in the European gas market to the detriment of participants and consumers in the market and of Ukraine as a major transit provider of gas.

Ukraine reiterated that European energy law requires that the operator of Nord Stream 2 shall be fully unbundled and independent from Gazprom and that the rules on third-party access and non-discriminatory, transparent and cost-reflective tariffs shall be applied to the entire pipeline from its ending point at Lubmin in Germany to its starting point at Ust-Luga in Russia.

From Ukraine’s perspective, to ensure the EU’s security of supply via diversification of transit routes, it is crucial that the alternative transit corridor from Russia to the EU through Ukraine should remain operational.

This requires that the Ukrainian transit corridor is opened for non-Gazprom-related parties for gas transport between Russia and Europe, in accordance with the energy solidarity principle, European competition law, and Germany’s international obligations towards Ukraine.

Ukraine also argues that Gazprom and Russia should prolong beyond 2024 their current transit arrangements with Naftogaz and Ukraine on similar terms.

No commercial justification

Sergiy Makogon, director general of GTSOU, Ukraine’s gas transmission system operator, told EURACTIV in written comments that there was no commercial rationale for Gazprom’s behaviour. He said that Gazprom is today paying Ukraine for 109 mcm/day of transit capacity – twice the volumes of the gas it is shipping to Europe.

“There is no commercial justification for such behaviour.  In fact, there can be no clearer evidence that those are deliberate and discretionary actions not to ship gas to Europe. Nord Stream 2 is not certified, but the efforts to terminate the Ukrainian transit route couldn’t be more obvious,” Makogon said.

“We remain strongly opposed to this geopolitically dangerous project that threatens the national security of Ukraine, erodes the European energy architecture, and seeks to circumvent EU regulations.”

“The certification of Nord Stream 2 AG would infringe on GTSOU’s commercial and legal interests, which is the basis for our application to BNetzA. Nord Stream 2 will not diversify gas transport routes and threatens European security of supply. We consider it our duty to inform our strategic partners about these concerns,” the GSTOU chief insisted.

From Kyiv’s perspective, continuity of gas transit via Ukraine remains the strongest non-military buffer to the escalating Russian aggression and is a cornerstone of the Eastern European energy security.

The Brief, powered by GIE — Pipeline politics for dummies

It’s not easy to make sense of the thousands of stories about Nord Stream 2. To make it simple, Russia and Germany want the pipeline, while Ukraine, Poland, and the US are against it. But why should Ukraine, Poland, the US and others meddle into what looks like bilateral business?

[Edited by Zoran Radosavljevic]

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