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German court says EU rules apply to Nord Stream 2 pipeline

German court says EU rules apply to Nord Stream 2 pipeline
German court says EU rules apply to Nord Stream 2 pipeline   -   Copyright  Thomson Reuters 2021
By Reuters

DUESSELDORF -The Nord Stream 2 gas pipeline is not exempt from European Union rules that require the owners of pipelines to be different from the suppliers of the gas that flows in them to ensure fair competition, a German court ruled on Wednesday.

The Duesseldorf Higher Regional Court threw out a challenge brought last year by the operators of the Gazprom-backed project to carry gas from Russia to Germany under the Baltic Sea. They had argued the rules were discriminatory.

The EU rules require the companies that produce, transport and distribute gas on European Union territory to be separate, or “unbundled”. They aim to ensure fair competition in the market and to prevent companies from possibly obstructing competitors’ access to infrastructure.

This means that the company transporting the gas must auction its capacity to third parties.

The Nord Stream 2 operator claims the rules, amended in 2019, were aimed at torpedoing the pipeline. The project is strongly opposed by many European governments, some of whom see it as a Russian state venture designed to increase the bloc’s dependence on Russian gas.

The rules will cost NS 2, which links Germany directly with Russia under the Baltic Sea, additional time and money but will not stop its completion.

The consortium also includes five western utilities and oil companies, namely Uniper, Wintershall-Dea, Royal Dutch Shell, OMV and Engie, who put up 50% of the finance.

The $11 billion project with a transport capacity of 55 billion cubic metres, has faced political opposition from Washington as well as from Ukraine and Poland, which stand to lose out on lucrative transit business if the pipeline goes into operation.