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GAS Nord Stream 2 9 October, 2018 10:00 am   

A directive that can change Europe

The dispute over the revision of the gas directive shows how strong is Russia’s influence on European politics and how much it harms European integration, writes Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

A frozen revision

The Platts Agency informs that work on the said regulation has been stuck in the Council of the European Union by a dispute between diplomats. The revision of the gas directive may subordinate the contested Nord Stream gas pipeline to European law. According to Platts, it can be accepted after the end of 2019, when the completion of construction of this bus is planned. This gas pipeline may distort competition in Central and Eastern Europe, as confirmed by the S&P Global Ratings study. It shows that the construction of Nord Stream 2 and Turkish Stream will change the market, because it will be more difficult for alternative projects to prove profitability, which is necessary to obtain creditworthiness. This is also confirmation of the thesis stated by Poland that Nord Stream 2 will undermine the development of the market in our region.

The revision of the gas directive proposed by the European Commission assumes that all import gas pipelines to the European Union must be subject to the third energy package, and thus anti-trust rules establishing transparency, an independent operator and non-discriminatory tariffs. This would affect the management of the gas pipeline by Russian Gazprom, and because of the need to adapt the investment to the regulation, it might delay the implementation of the project.

The introduction of retroactive provisions to the initiated project would still be possible but harder to push through. If Nord Stream 2 is treated as an existing gas pipeline, perhaps it could be subject to exemption regulations from the revised gas directive. However, it is not known what the final proposal of the revision will look like because it is stuck in the Council of the European Union. The decision on the further fate of the gas directive depends on the Austrian presidency of the European Council – the Platts source argues.

Meanwhile, the Austrian OMV is the financial partner of Nord Stream 2, as well as the German BASF/Wintershall and E.on/Uniper. Politico.eu informs that Poland, Lithuania, Latvia, Estonia, Croatia, Denmark, Ireland, Sweden, Slovakia and the United Kingdom are in favor of revising the gas directive. The group of supporters is therefore important, but the decision in the Council requires consensus, and it is not due to Germany’s resistance and the lack of action by the presidency from Austria.

The source of the Platts agency convinces that the EU governments are to submit further positions on the revision of the gas directive until mid-October. The agency reminds that the work will be delayed in addition to the preparation for the elections to the European Parliament, which will force the chamber to stop work in April. New parliamentarians, in turn, will need time to get acquainted with the documents. Supporters of the search hope that the work will be accelerated by the Romanian Presidency, which will take over the reins of the European Council from 1 January. However, the Finnish presidency will follow it. Finland has no problem with Nord Stream 2 and has issued all approvals for the implementation of the section on its territory, thanks to which construction on the Finnish waters started in September.

Not everything is lost

It can not be said that the revision of the gas directive is lost. We have repeatedly written in BiznesAlert.pl that Nord Stream 2 is probably delayed, and the scale of delay may vary from several months to even a year. The project may be influenced by possible US sanctions, which have not been introduced yet, but German diplomats unofficially admit that they are possible. Peter Beyer, responsible for the transatlantic relations of the German government, told the Bloomberg agency that his sources convince that the US will ultimately introduce a sanction against Nord Stream 2 financial partners. This could happen in his opinion just before the Senate elections in November this year or on early next year, which BiznesAlert.pl informed about.

It is possible to revise the route taking into account the section avoiding the territorial waters of Denmark, which still has not consented to leading the gas pipeline from Russia to Germany. Nord Stream 2 AG has applied for an alternative route through the exclusive territorial zone of Denmark north of Bornholm. Copenhagen has not yet come to the conclusion. According to representatives of Nord Stream 2 AG, Denmark’s refusal to grant approval by mid-2016 will not prevent the project from being completed by the end of 2019 as planned.

A strike at the European integration

The action of the governments of Austria and Germany, as well as others following them, in defending the particular interests of several state-owned companies in violation of the interests of other member states is a blow to the credibility of European integration. It is also proof that some member countries prefer bilateral relations with Russia to cooperation within the European Union. Vienna and Berlin are losing arguments for enhanced integration, for example in the field of climate policy, which they will probably rebuke during COP24 climate summit in Katowice. Will anyone in Poland listen to them in the light of the Nord Stream 2 case? How will this attitude affect the EU discussion on the future of integration?



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