Gazprom’s plan to circumvent eastern Europe and bring more Russian gas directly to Germany faces a crucial test in European courts this month as Poland seeks to extend an injunction curbing the Russian group’s access to a distribution pipeline.
The legal showdown over gas supplied via the Baltic Sea is the latest move in the long battle over Europe’s energy infrastructure as the EU tries to reduce reliance on Russia, and Gazprom fights for market share.
The arguments are a dry run for the fight over Russia’s plans to connect its $11bn Nord Stream 2 pipeline — which would run alongside the existing Nord Stream 1 through the Baltic Sea — into Europe. The plan would enable it to bypass Ukraine, which carries a significant portion of Russia’s gas supplies to Europe through a Soviet-era pipeline across its territory, and other transit states.
In a little noticed December decision, Poland’s state gas producer won a rare temporary court order stopping Gazprom using new rights to use nearly all of Opal, a feeder pipeline that distributes gas from Nord Stream 1 to Germany and beyond.
The European Court of Justice is expected to rule soon on whether to extend the interim injunction until a full ruling is reached — potentially years from now. This would in effect block a decision by the European Commission in October that exempted Gazprom from EU rules requiring pipeline operators to allow access to third parties and let the Russian group use nearly all Opal’s capacity.
Gazprom will need a similar exemption for Eugal, the planned connector for Nord Stream 2, making the decision on Opal a test case.
The court hearing pits Poland against an unlikely alliance of Gazprom, the commission and Germany, which want restrictions on Opal eased to allow more Russian gas to be imported.
Poland has emerged as the most active opponent of Nord Stream 2. The country’s anti-monopoly watchdog warned in August it would block the venture because it would give Gazprom more dominance in central Europe. That prompted five west European partners to pull out of plans to take stakes in the Nord Stream 2 consortium, forcing Gazprom to finance it on its own.
Warsaw and other critics of the Russian pipeline plan warn it will increase dependence on Russian gas as well as cutting out Ukraine. Sibren de Jong, of The Hague Centre for Strategic Studies, dismissed Gazprom’s claims that the pipeline was a commercial project. “It is very much about securing the market share of Gazprom in Europe,” he said.
Were Poland to fail in its attempt to block Gazprom’s Opal exception it would help Nord Stream 2 to argue for a similar exception for Eugal, Mr de Jong argued.
Piotr Wozniak, chief executive of the Polish gas producer PGNiG, said the Opal decision was a “big obstacle” to diversifying sources of supply and would make Gazprom “incredibly strong”.
The Opal issue is raising tensions between Germany and Poland while leaving Ukraine more politically isolated in its stand-off with Moscow.
Senior business and political figures in Germany are attracted by the possibility of making the country a gas hub for Europe using increased supplies from Russia, and potentially securing lower prices for German industry. Berlin has supported Nord Stream 2 even though chancellor Angela Merkel has been Europe’s staunchest supporter of EU sanctions against Moscow over its military intervention in Ukraine.
Yuri Vitrenko, chief commercial officer of Naftogaz, Ukraine’s national gas company, confirmed his company had seen transit volumes decrease while Gazprom had full access to the Opal connector. Naftogaz was considering joining the Polish challenge to what he called a surprising and “anti-competitive” decision by Brussels, he added.
Despite the Nord Stream 2 consortium falling apart in August and political concerns, Gazprom is continuing with the project and Brussels has limited scope to challenge it.
The commission and Gazprom declined to comment. An Opal spokesperson said the commission decision “improves the possibility for network access for non-dominant companies in the Czech Republic while also securing the efficient use of available pipeline capacity”.
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