NS 2 Keeps Watchful Eye on Gas Directive

The 100% owner of the under-construction  55bn m³/yr Nord Stream 2 gasline (NS 2) said February 13 it would wait until the final text of the European Union gas directive amendment was agreed before commenting, rather than speculate now on what it might mean.

The European Commission (EC) appears to have succeeded in its aim of bringing offshore pipelines within the ambit of the gas directive, but now the potentially long process of negotiations involving the council, the EC and the parliament must start.

A spokesman for NS 2, a Russian Gazprom subsidiary based in Switzerland, told NGW in a statement: "We take note that negotiators from the European Parliament, the Council and the European Commission provisionally agreed on amendments to the EU’s gas directive. The procedure is still ongoing and any legislative text needs formal approval by the parliament and the council. We will continue observing the process and we will study the new legislation once it has been made available. We refrain from speculation about potential impacts of draft legislation that has not yet been formally approved."   

The statement also said that NS 2 is proceeding according to schedule, with more than 600 km of pipes laid in accordance with existing permits. It added Nord Stream 2 will continue to observe the ongoing legislative process regarding the EU gas directive.

It concluded: "NS 2 will make a positive contribution to the Energy Union goals by securing an additional route of gas supply. The gas demand outlook for Europe makes a compelling case for this investment which is fully compatible with the continued imports of gas through existing routes. The implementation of the project continues in full compliance with applicable legislation."

Opposition to the pipeline within the EU came principally from the Baltic states and Poland. Only Gazprom is in a position to inject gas upstream in Russia as it is the statutory export monopoly. Under EU law, gas pipelines must be owned and operated separately from the entity that supplies the gas; and they are obliged to offer third-party access, except where an exemption has been granted.

Gazprom is the sole owner and operator of the line but half the financing costs have been spread equally among five European companies: Austrian OMV, French Engie, German Uniper and BASF's Wintershall unit and Anglo-Dutch Shell.

The EC said February 13 that Europe was "closing a loophole in the EU legal framework. The new rules ensure that EU law will be applied to pipelines bringing gas to Europe and that everyone interested in selling gas to Europe must respect European energy law. Together with the previously agreed rules on security of gas supply and intergovernmental agreements, Europe has given itself a strong set of tools to deal effectively and collectively with our external energy suppliers."

But industry group Eurogas said the same day: "Clarity is needed on the application of laws in the case of potential conflict between member state and the European Union laws, so as to provide investor certainty for all infrastructure projects covered by the amended directive. It is also important that existing investment decisions are also not negatively impacted by the new amendment and that the principles of the Energy Charter Treaty are upheld."