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The German Regulator Refused To Exempt Nord Stream 2 From The EU Gas Directive Rules

The German Regulator Refused To Exempt Nord Stream 2 From The EU Gas Directive Rules

The Federal grid Agency of Germany refused Nord Stream 2 AG to withdraw the Nord Stream 2 project from the rules of the updated EU Gas Directive. This is reported in the regulator's decision published on Friday.

"Board number seven on may 15 rejected the application of Nord Stream 2 AG to exempt the part of Nord stream 2 that runs in the territorial waters of Germany from regulation," it says.

The Agency notes that the necessary condition for removing the pipeline from the rules of the updated Gas Directive was its implementation before May 23, 2019. "In the case of Nord Stream 2, this is not the case," the Agency believes.

The full text of the decision will be published later. "It was possible for all [EU] member states to study the Nord Stream 2 AG application with appendices and make an application. It was used by 10 countries, " the decision of the 7th panel says.

Nord Stream 2 AG pointed out that the concept of "project completion" should be considered more broadly than just in terms of construction and technical processes. According to the company, it is necessary to take into account the fact that by the time the new rules came into force, billions of dollars of investment had already been made, taking into account the previous legal situation.

As reported by the Handelsblatt newspaper, this argument was rejected by the German Agency. It was based on the" construction and technical understanding "of the term"completion of the project. There can be no question of an economic and functional understanding," the Ministry said in a note, excerpts of which were published by the publication on May 1.

Nord Stream 2 AG may file a protest against the regulator's decision to the Higher land court in Dusseldorf. The latter, in turn, can immediately redirect the complaint to the European court of justice.

The Federal Grid Agency of Germany accepted applications from Nord Stream AG and Nord Stream 2 AG to remove the Nord Stream and Nord Stream 2 pipelines from the updated EU Gas Directive in mid-January.

The application from Nord Stream AG for exemption from regulatory requirements, according to paragraph 28b of the Federal law on the energy sector of Germany was received on December 23 last year, from Nord Stream 2 AG - on January 10, 2020. The Agency indicated at the time that the procedure should be completed by May 23, 2020.

The revised Gas Directive was agreed in record time at the beginning of last year. The essence of the changes made to it is to extend the rules of the third community energy package to pipelines passing in the EU Maritime economic zone, which oblige the operator to reserve up to 50% of the gas main's capacity for pumping fuel from alternative suppliers.

Although the EC claims that this provision will apply to all offshore gas pipeline projects, it has never hidden that the third energy package itself and the amendments to the EU Gas Directive were developed and implemented in order to expand the possibility of administrative non-market control by Brussels over Russian gas exports to the member states of the community.

Meanwhile, the question of applying the revised Gas Directive remains open. Although the amendments themselves came into force in June 2018, most EU countries did not have time to take them into account in their national legislation, which opens up wide opportunities for challenging their application through the courts.

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