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Handelsblatt Learned About The Imminent Subordination Of Nord Stream 2 To The EU Gas Directive

Handelsblatt Learned About The Imminent Subordination Of Nord Stream 2 To The EU Gas Directive

The German regulator, the Federal grid Agency of Germany, will reject the request of the companies operating the Nord Stream and Nord Stream 2 gas pipelines to exempt them from implementing the provisions of the EU Gas Directive, according to Handelsblatt.

The decision is based on the fact that the Russian energy project does not meet the criteria for exemption from the provisions of the EU gas Directive. As follows from the Directive, only those gas pipelines that were completed before the date of entry into force of the document, i.e. may 23, 2019, can count on an exception.

Nord Stream 2 is still under construction, although it is 90% ready, the newspaper writes.

According to Handelsblatt, the decision of the German regulator will be a blow to the project and the Russian oil and gas company Gazprom, as the need to comply with the EU gas Directive will affect the profitability of the pipeline.

The German Federal Network Agency will officially announce its decision on May 8.

In January, the operators of the Nord Stream and Nord Stream 2 gas pipelines applied to the Federal grid Agency of Germany with a request to exempt them from implementing the provisions of the EU gas Directive. The applications referred to an exemption from the rules contained in paragraph 28B of the law on the energy economy.

This paragraph regulates the operation of foreign gas pipelines passing through Germany. Third-country gas pipelines that run in EU territorial waters must comply with rules that previously applied only to land-based pipes.

As stated in the Directive, a company producing gas cannot own the gas pipeline that supplies it to the EU. As a result, the gas Directive, if extended to the Russian gas pipeline, will affect Nord Stream 2, which is being built by Nord Stream 2 AG, whose sole shareholder is Gazprom.

In November, it became known that the operator of the second line of the Nord Stream 2 gas pipeline AG declared non-compliance with the amendments to the energy Charter and appealed to the arbitration court.

In December, US President Donald Trump signed the country's defense budget, which provides for sanctions against companies building the Nord Stream 2. On the same day, Swiss company Allseas suspended work on the project and decided not to resume laying the pipeline.

Russia has announced its intention to independently complete the Nord Stream 2 project and put it into operation in 2020.

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