Oh no, Angela! Merkel’s £8bn deal with Putin dealt blow – pipeline forced to obey EU rules

EU: Guy Verhofstadt calls to ‘reconsider’ Nord Stream 2

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The project is not exempt from EU rules that require the owners of pipelines to be different from the suppliers of gas that flows in them to ensure fair competition, the court ruled. The Dusseldorf Higher Regional Court dismissed a bid by Russian-owned Gazprom to overturn the German Network Agency’s decision to impose the Brussels measures. It means the Nord Stream 2 project, which pumps natural gas from Russia to Germany, could be fined by eurocrats if it fails to copy with the EU regulations.

However, the ruling does not have any impact on the construction of the project, which is expected to be completed this month.

Technically, the EU rules don’t prevent turning on the gas taps, but Gazprom would have to restructure Nord Stream 2 to bring it into compliance.

Refinitv gas analyst Xun Peng said: “Russia’s Gazprom will be forced to auction pipeline capacity, which could delay deliveries further.”

EU rules require firms that produce, transport and distribute gas within the bloc to be separate – known as “unbundled”.

The regulations are designed to ensure fair competition and stop companies from obstructing competitors’ access to infrastructure.

This means the company transporting gas must auction its capacity to third parties.

The operator of Nord Stream 2 argues that the rules, amended in 2019, were designed to bring the project to its knees.

Many EU governments strongly oppose the pipeline, some of whom see it as a Russian-state attempt to increase the bloc’s reliance on Russian gas.

Nord Stream 2 said the German court’s decision highlighted the “discriminatory effect” of the EU’s so-called Gas Directive.

The Kremlin said the ruling was a “corporative issue”, adding that the consortium should take care of it itself.

Spokesman Dmitry Peskov said: “We can only reiterate that the Nord Stream 2 is a purely commercial project aimed at significantly strengthening European energy security.”

The consortium behind the pipeline includes five western oil and utility companies – Uniper, Wintershall-Dea, Royal Dutch Shell, OMV and Engie – who put up 50 percent of the funding.

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The £8billion project, which has a transport capacity of 55 million cubic metres, has faced significant political opposition from Washington.

Ukraine and Poland are also vehemently against Nord Stream 2 because they fear they will lose out on gas transportation business if the pipeline goes into operation.

US President Joe Biden and German Chancellor Angela Merkel last month agreed on a deal to avert the threat of US sanctions targeting the pipeline and its operators.

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Merkel ‘under pressure’ to put Nord Stream 2 on hold says expert

Russian President Vladimir Putin last week revealed there are less than 10 miles of pipeline left to be completed.

Mrs Merkel called on Moscow to extend a gas transit deal with Ukraine that inspires in 2024 when the pair last met.

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