Yahoo Finance Gazprom sues Germany over Nord Stream 2 decision
Gazprom has said it will take Germany to court over a decision not to exempt the Russian company’s controversial gas pipeline from EU regulations governing energy markets.
The pipeline, Nord Stream 2, is an $11bn (£8.9bn) subsea link that aims to double the delivery of Russian natural gas to Europe’s biggest economy.
However, the project has been buffeted by setbacks, including the introduction of US sanctions last December by President Donald Trump.
Now, the Swiss subsidiary of Gazprom that is behind the project has criticised the decision by Germany’s energy watchdog not to waive the regulations as "discriminatory" and opposed to the "constitutional guarantees of the Basic Law".
The German regulator ruled recently that Nord Stream 2 must be forced to comply with European competition standards, in line with the EU Third Energy Package that governs energy monopolies.
The package, introduced in 2009, states that the supplier of gas, in this case Gazprom, cannot also own the pipeline.
In theory, this ruling means that Gazprom will be forced to give half of its pipeline capacity to independent gas suppliers in Russia.
The pipeline, set to be completed by the end of the year, has the ability to deliver about 55 billion cubic metres of gas annually.
Because the pipeline is only connected to its oil fields in Russia, Gazprom said no other suppliers would be able to use it and force it to run the pine at just half its capacity.
Originally, Gazprom hoped to exploit a loophole in European law that allowed for the same company to control a pipeline and the gas within it, so long as the pipeline was offshore. As a result it built Nord Stream 2 under the Baltic Sea, passing through the waters of Russia, Finland, Sweden, Denmark and Germany.
But in 2017, the European Commission said it would seek to close this loophole, throwing the project in to disarray.
Two years later, the European Parliament overwhelmingly voted to include offshore projects under the same regulatory framework, effectively scuppering Nord Stream 2.
After an exemption to this new rule was denied, Gazprom is now expected to lodge an appeal in the Supreme Court in Dusseldorf, which is likely to redirect the appeal to the European Court of Justice.
