Nord Stream 2 exploring plans to avoid EU-regulation

WNM | Mar 14, 2019 at 11:12 AM

The partners of the Nord Stream 2 consortium are said to explore a legal trick to circumvent EU regulation for the project. According to the Financial Times, the group wants to set up a separate legal entity for the pipeline which runs the pipeline within the section where EU law applies. The partners are said to discuss, whether “a new company would own and manage the small part of the undersea pipeline within German territorial waters”. The FT writes: “While this section would be subject to EU rules, the rest of Nord Stream 2 — nearly 1,200km through the Baltic Sea — would remain outside the bloc’s jurisdiction, according to three people familiar with the plans.”

The FT does not name one single source for its story. No confirmation or denial has been issued by one pf the parties involved.

The project is supported by the German government. Former German chancellor Gerhard Schröder is Chairman of the supervisory board of Nord Stream 2. 

The new entity would be in charge of the last 50 kilometers of the pipeline, whereas the 1,200 km through the Baltic Sea would not be affected by the new EU gas directive. 

The approach is not new: Also for the first Nord Stream pipeline known as Opal the partners used a similar structure. 

About 830 km of the Nord Stream 2 gas pipeline has been laid on the bottom of the Baltic Sea to date, or 34% of the pipeline’s total length, Gazprom said in a statement, according to TASS.

This information was voiced during a working meeting between Gazprom CEO Alexei Miller and Chairman of the Uniper Supervisory Board (one of Gazprom’s partners in the Nord Stream 2) Bernhard Reutersberg. The parties discussed current issues of cooperation and Russian gas supplies via the Nord Stream 2 pipeline.

On March 12, the European parliament adopted the resolution on political relations between the EU and Russia. The document contains the proposal to stop the Nord Stream 2 project, while Russia is no longer regarded as a strategic partner of the EU.

Uniper did not comment on the report but expressed confidence that the Nord Stream 2 will be implemented.

The Nord Stream 2 project will consist of two gas pipeline lines with a total capacity of 55 billion cubic meters of gas per year from the coast of Russia through the Baltic Sea to Germany. The total capacity of the project is 55 billion cubic meters of gas per year. The cost of construction is estimated at 9.5 billion euros.

The pipeline will bypass transit countries - Ukraine, Belarus, Poland and other Eastern European and Baltic countries through exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark and Germany. Only Denmark has not issued permission for the construction. According to the statements of the Prime Minister Lars Lokke Rasmussen, he is going to block or postpone the implementation of the project.

Nord Stream 2 AG, which is the project’s operator, expects to get the permit from Denmark by the end of 2019.

The sole shareholder of Nord Stream 2 AG is Gazprom. Gazprom's European partners - Wintershall, Uniper, OMV, Engie and Royal Dutch Shell - will finance 50% of the project.