German regulator bans OPAL operator from holding new auctions on gas pipeline capacity

TASS Russian News Agency | Sep 13, 2019 at 1:12 PM

BERLIN, September 13. /TASS/. Germany's Federal Network Agency has banned OPAL Gastransport, the OPAL gas pipeline's operator, from holding new auctions on distribution of gas pipeline capacities in accordance with a decision of the European Court of Justice. This is according to the regulator's statement released on Friday.

On September 10, on considering Poland's lawsuit, the EU Court of Justice overturned the European Commission's decision of 2016, according to which Gazprom could fully use the capacities of the OPAL gas pipeline. The Russian company reserves the right to use 50% of OPAL's capacity, but it will no longer be able to participate in auctions for the remaining 40%.

"The Federal Network Agency considers OPAL Gastransport to be banned from holding additional auctions for [granting] transit capacities since the court decision was taken. This in particular applies to the auction for October, which was supposed to be held on September 16," the regulator said.

That means that Russian gas giant Gazprom will not be able to take part in the auction to get additional capacity of OPAL pipeline capacities for its gas transit.

The German regulator also banned the Russian gas giant from supplying gas via the pipeline exceeding the capacity, which was prescribed in the court's decision

"Since the verdict was brought, Gazprom has been banned from supplying gas using the transit capacities which are affected by that decision. According to the Federal Network Agency, Gazprom has alternative routes and shipping terminals to further fulfill its obligations to supply gas to the European Union," the regulator said.

"If the company violates the conditions defined by the verdict, the Federal Grid Agency reserves the right to impose fines," the document stresses.

OPAL is a branch pipe connecting Nord Stream to the gas transmission system of Central and Western Europe. Its capacity is 36 billion cubic meters per year.

For several years, Russia could use only 50% of the pipeline's capacity, as prescribed in the EU's Third Energy Package. Gazprom asked for permission to use OPAL's 100% capacity, as the Russian holding company is the only gas supplier to the Nord Stream pipeline, which receives gas via OPAL. In autumn of 2016, the EC allowed Gazprom to participate in auctions for the right to use another 40% of Opal's transit capacities.

However, at the end of 2016, Poland appealed against this decision, claiming that it contradicts the principle of diversification of supplies. Poland also believes that the decision poses a threat of disruption or termination of supplies, since gas flows through the territory of Ukraine. In the summer of 2017, the Dusseldorf Higher Regional Court decided to remove interim measures on Gazprom's use of Opal's facilities imposed by the lawsuit. Poland finds that now the decision of the European Court of Justice will not allow Gazprom to abandon gas transit through the territory of Ukraine.