Amendments To EU Gas Directive May Leave Nord Stream 2 Half Empty For Long Time - Reports

Amendments to EU Gas Directive May Leave Nord Stream 2 Half Empty for Long Time - Reports

The Nord Stream 2 gas pipeline is likely to remain underutilized for at least several years of operation due to the latest amendments to the EU gas directive, Russian media reported on Monday

MOSCOW (Pakistan Point News / Sputnik - 18th February, 2019) The Nord Stream 2 gas pipeline is likely to remain underutilized for at least several years of operation due to the latest amendments to the EU gas directive, Russian media reported on Monday.

Last week, representatives of the Council of the European Union, the European Commission and the European Parliament reached an agreement on amendments to the EU gas directive that would allow to extend internal EU market regulations to pipelines to and from non-EU countries. This would include Nord Stream 2, which is expected to carry gas from Russia to Europe.

According to Russia's Kommersant newspaper, the amendments, in particular, prescribe that not only the European Commission, but also a committee of representatives from all EU countries will have to give consent to make a project exempt from EU norms, which would make the procedure lengthy and difficult.

The media outlet, citing informed sources, said that the current version of the text was final as it would be "undoubtedly approved" at the re-vote at the Council of the EU on February 20.

In practice, the amendments mean that the Nord Stream 2 pipeline must have an operator that is independent from Gazprom and that third parties must receive access to the facility. Currently, the Nord Stream 2 AG consortium is fully responsible for the construction and operation of the pipeline.

According to the publication, there is no problem with creating an independent operator, but the third-party access cannot be organized, since only Gazprom, as the only company eligible for gas export, can supply gas to the Russian part of the pipeline. In this case the European Commission may prohibit the gas giant from using more than by 50 percent of Nord Stream 2 facility, leaving the other half to potential "third parties."

According to the amendments to the gas directive, Germany, as the EU country where the gas pipeline leads to, may conclude an intergovernmental agreement with Russia on exceptions to the directive. The process will require interaction with the European Commission at two stages. First, Brussels must grant Germany permission to negotiate the intergovernmental agreement with Russia, and then, after the talks are done, permission to sign the agreement. In both cases, the commission needs to make a decision within 90 days but has the right to request additional information, thereby delaying deadlines. The commission may also make recommendations to Germany regarding the text of the treaty and the inclusion of certain provisions.

Nord Stream 2 is a joint venture of Russian gas giant Gazprom and five European companies. It aims to deliver 55 billion cubic meters (1.9 trillion cubic feet) of Russian natural gas annually to the European Union. The pipeline project has been welcomed by some countries in Europe and opposed by the others, who raise concerns over alleged danger of Europe's dependence on Russia and the subsequent diminished transit role of Ukraine.