German Court Says EU Rules Apply To Nord Stream 2 Pipeline

The Nord Stream 2 gas pipeline is not exempt from European Union rules that require the owners of pipelines to be different from the suppliers of the gas that flows in them to ensure fair competition, a German court ruled on Wednesday, August 25.

The Duesseldorf Higher Regional Court rejected a challenge brought last year by the operators of the Gazprom-backed project to carry gas from Russia to Germany under the Baltic Sea. They had argued the rules were discriminatory.

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

EU rules require the companies that produce, transport and distribute gas within the bloc to be separate, or “unbundled.” They aim to ensure fair competition in the market and to prevent companies from possibly obstructing competitors’ access to infrastructure.

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

The Nord Stream 2 operator claims the rules, amended in 2019, were aimed at torpedoing the pipeline. The project is strongly opposed by many European governments, some of whom see it as a Russian state venture designed to increase the EU’s dependence on Russian gas.

Nord Stream 2 stated the German court’s decision highlighted the “discriminatory effect” of the European Union’s amended Gas Directive.

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