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Nord Stream 2 pipeline takes EU to court for 'trying to stall project with unfair legislation'

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By Cristina Abellan Matamoros  with REUTERS
Nord Stream 2 pipeline takes EU to court for 'trying to stall project with unfair legislation'
Copyright  REUTERS/Anton Vaganov/File Photo

A Russian-led project to bring a new gas pipeline to Europe has taken the European Union to court to challenge new rules it says are meant to stall the project.

Nord Stream 2 — a new undersea gas pipeline being built by Russia’s energy firm Gazprom and backed by five European energy companies — said on Friday it had asked the Court of Justice of the European Union to annul an EU gas directive, which dictates the pipes cannot be directly owned by a gas supplier.

The 1,225-kilometre pipeline will run under the Baltic Sea from Russia to Germany. Its construction began in 2010 and is scheduled to be finalised by the end of this year.

READ MORE: As the EU tightens regulations on Nord Stream 2, why all the fuss about a new gas pipeline?

The owner of the pipeline is Russia's energy firm Gazprom, who will also be its operator even though 50% of the funding comes from various European energy companies, including Germany's Uniper and BASF, the Anglo-Dutch Shell, Austria's OMV and France's Engie.

The EU tightened regulations on Nord Stream 2 out of concerns the pipeline would give too much control of the EU's energy supply to Russia.

Critics are also worried that the pipeline could deliver a major blow to Ukraine's economy because, along with its TurkStream (a pipeline that runs from Russia to Turkey), Russia would be able to completely bypass Ukrainian lines, leaving Kyiv without gas transit fees.

But not everybody shared this opinion. Germany, who has invested a lot in the project, believes the economic benefits outweigh the issues.

Nord Stream 2 argued it's been unfairly targeted by legislation to slow down the project.

“The amendment was clearly designed and adopted for the purpose of disadvantaging and discouraging the Nord Stream 2 pipeline,” it said in a statement, adding that the new rules breached “EU law principles of equal treatment and proportionality”.

The new legal battle brings uncertainty to whether Nord Stream 2 will be operational by the end of the year.

The project is also awaiting a permit from Denmark to finish construction.