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Energy LNG Nord Stream 2 24 July, 2017 9:00 am   
Editorial staff

Jakóbik: Gazprom fills up the tank of EU enemies in Poland 

“The Court’s verdict on the OPAL dispute will be made as late as in 2019. However, because of the Court’s President’s decision, until then Russian monopoly would be theoretically possible over the pipeline that transmits Russian gas through Germany to Central and Eastern Europe. However, the auctions will take place only in August 2018,” writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl.

The Polish Press Agency (PAP) reported that the President of the General Court rejected Poland’s and PGNiG’s applications to suspend the EC’s decision on conducting auctions for 50% of OPAL’s transport capacity. The other 50% is used by Gazprom, while the capacity in dispute may be potentially also taken over by the Russian giant as the only interested party.

PAP reminded that Poland and PGNiG argued that the increase of transmission capacities of the OPAL pipeline will cause a drop in gas transmission via the Yamal-Europe and Brotherhood pipelines and thus “threaten gas supply security to Poland or will be detrimental to competition.”

According to the parties, the harm may be irreparable before the final sentence is given. The Court pointed that the applicants “have failed to show that the harm suffered as a result of the contested decision is serious and irreparable and therefore that decision remains applicable until delivery of the judgments on its lawfulness.” This does not mean that the Court will rule in favor of Gazprom. The consent to withdraw the suspension until the final verdict in 2019, will allow for the European Commission’s decision to be enforced.

PGNiG showed that historically every time when a new line of Nord Stream, which enabled gas transmission that omitted Ukraine, was opened, the amount of gas transmitted via its territory dropped. When the OPAL pipeline was opened in 2011 the deliveries dropped by about 20 bcm to 81.2 bcm a year. When NEL was put into operation in 2013, the transmission decreased by 24 bcm to 59.4 bcm annually. The total increase of deliveries via Nord Stream thanks to OPAL and NEL was 38 bcm, while transmission via Ukraine dropped by 42 bcm. At the same time, before Nord Stream was launched, 91% of the capacity of the Brotherhood pipeline was used. Today that figure stands at about 37%.

After the EC had announced its decision to let Gazprom use more OPAL capacity, but before PGNiG’s court application and the court’s decision to suspend it, in December 2016 a record increase in the pipeline’s and Nord Stream’s transmission was noted. In January the German regulator Bundesnetzagentur followed the court’s decision and Gazprom’s transit went back to the levels from before the EC decision. Today we may expect that transmission via OPAL will increase again.

This will happen at the expense of transmission via Ukraine and Slovakia. This is how the Commission’s decision undermines the EU policy by the Dnieper River to facilitate the particular interests of German companies, which will benefit from the fact that the increase in gas transit via Germany will boost their significance as a transit country for Russian gas. Despite that, in official statements Berlin says this is just business and does not see the political implications that other countries, including Poland, are pointing to. The growing influence of Gazprom in Germany and Central and Eastern Europe will erode the policy of decreasing gas dependence on Russia and will increase the dependency of European policies on Moscow.

Even though the Court has not yet ruled in favor of Gazprom, it did give the company a serious argument. It stated it was impossible to prove that Poland and PGNiG would bear losses because Russians would be able to de facto fill OPAL up, because if no-one will want to use 20 out of the 50% of the new capacity booked for competition, the Russian tycoon will be able to claim it. Together with the half of the OPAL capacity Gazprom has today, the Russians will be able to use the pipeline’s entire capacity. Despite that the court refused Poles to carry out their request to freeze EC’s decision.

However, the fact that the EC’s decision on OPAL has been sustained until a final verdict is given will not allow Gazprom to manipulate the market in a way it could have if Poland had not intervened. The bidding procedure, whose winners will receive permits to use OPAL for 15 years will take place only in August 2018. PGNiG’s application to the Court blocked similar procedures in the spring of 2017 because suspending the EC decision made it impossible to conduct them. If they did take place, in one auction Gazprom could book OPAL capacity for as long as 15 years and thus cement this intolerable situation for a decade and a half. This would impede the development of the Northern Gateway, i.e. the expansion of the LNG terminal in Świnoujście and construction of the Baltic Pipe, which as of 2022 are to become a comprehensive alternative to Poland and the entire region.

Still, if the Court rules in favor of Gazprom, the critics of European integration will argue that it does not offer tangible benefits to Member States because Brussels does not protect their interests. Despite Poland’s and PGNiG’s extensive argumentation, which I have written about in other places and the protections offered by the Third Energy Package regulations, Gazprom can count on exceptions and enjoy EC’s special treatment, which cannot be prevented by a European court.

The Polish supporters of EU integration, which believe that together with NATO, the EU is our protective shield, will have an even harder time to continue to defend their position. Considering the growing tensions within Poland, the ruling will add fuel to the fire and will be a driver for anti-European, destabilizing forces in our country.

We have to expect it will become yet another argument used against the European Union and for the lone walk on the tightrope between Brussels and Moscow in Victor Orban’s style. This is how EU institutions that support Gazprom realize the Kremlin’s basic goal, which is Europe’s disintegration, which in the past was able to integrate to, among others, resist the soviet, now Russian threat.



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