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UPDATE 2-EU gas pipeline rules could slow Russia's Nord Stream 2


Reuters
Updated: 13-02-2019 20:34 IST
UPDATE 2-EU gas pipeline rules could slow Russia's Nord Stream 2

The European Union reached a provisional deal on Wednesday on new rules governing import gas pipelines, casting doubt over the operating structure of Russia's planned Nord Stream 2. The Russian pipeline already faces uncertainty after Denmark's potential ban on its planned route through its territorial waters and sanction threats by the United States.

The draft law calls for all import pipelines to meet EU rules by not being directly owned by gas suppliers, applying non-discriminatory tariffs and transparent reporting and opening at least 10 percent of capacity to third parties. EU Commissioner Arias Canete, who is responsible for energy, said that the EU was closing a loophole as its dependency on natural gas imports increases.

Exceptions were only possible under "strict procedures", the European Commission said, adding it would play a decisive role. "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," Canete said in a statement.

The deal reached by representatives of the European Commission and parliament and the 28 member states should lead to a new law in the coming months. EU countries would then have nine months to transpose it into national law. The draft law could slow but not stop the project, led by Russian state energy firm Gazprom in partnership with five Western firms - Germany's Uniper and BASF's Wintershall unit, Anglo-Dutch firm Shell, Austria's OMV and France's Engie.

"We will continue observing the process and we will study the new legislation once it has been made available," Nord Stream 2 said in a statement. "We refrain from speculation about potential impacts of draft legislation that has not yet been formally approved."

"POSITIVE CONTRIBUTION" Nord Stream 2 has divided the EU as Eastern European, Nordic and Baltic Sea countries see the 1,225 km (760 mile) pipeline, which is already under construction, as increasing EU reliance on Moscow, while those in northern Europe, especially Germany, prioritise the economic benefits.

Nord Stream 2 says the project will "make a positive contribution to the Energy Union goals by securing an additional route of gas supply". Denmark faces a foreign policy quandary as it has to decide whether the pipeline can go through its territorial waters after it passed new legislation on pipelines allowing it to ban Nord Stream 2 on foreign policy and security grounds.

Moscow's military posturing in and around the Baltic Sea has rattled nerves in the Nordic states and Denmark's Foreign Minister Anders Samuelsen, who has been urging a common European stance, cautioned that a Danish decision on the route would still be based on a broader assessment in relation to its defence, security and foreign policy interests. "I would like to emphasize that nothing the Russians are doing is currently pulling towards an approval," he said.

In case of a Danish 'no', the project would still be likely to go ahead as the consortium has applied for an alternative route avoiding Denmark's waters. (Reporting by Philip Blenkinsop in Brussels and Stine Jacobsen in Copenhagen Editing by Alissa de Carbonnel, Alexandra Hudson and Alexander Smith)


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