Three OPEC+ countries have announced additional production cuts to the tune of over 1 m b/d until oil prices drop. The coronavirus did kill the oil deal, but it’s not done yet. Further cuts will be determined by the market, not political declarations – writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl. Czytaj dalej„The oil agreement is turning into a zombie”→
The German daily Handelsblatt has published bombshell news that may decide about the future of Nord Steam 2. If it is confirmed, the gas pipeline will be in even more trouble than that caused by the coronavirus pandemic, which has already undermined its profitability – writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl.Czytaj dalej„Will Nord Stream 2 succumb to the coronavirus?”→
The German regulator Bundesnetzagentur decided that Poland’s PGNiG will be allowed to participate in the procedure where the controversial Nord Stream 2 project will apply for derogation from the EU Gas Directive. As long as the procedure is open, Russia will not be allowed to transmit gas via the pipeline – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
The Gas Directive was amended on the initiative of the European Commission due to the efforts by, among others, Warsaw. It brings the controversial NS2 gas pipeline between Germany and Russia under EU regulations, according to which the project will have to allow third party access, designate an operator independent of Gazprom and implement non-discriminatory tariffs. These regulations apply to all gas pipelines and the derogation is awarded only to those which had been completed before the amended directive entered into force on 23 May 2019. Despite this clear rule, Nord Stream 2 AG, the company behind the pipeline, has applied for a derogation.
PGNiG will be allowed to present its opinion during the NS2 derogation procedure. In the meantime the European Commission needs to investigate whether the project is in line with the EU law before the transmission starts. This means that without Brussels’ approval no gas will be allowed to flow via Nord Stream 2, which is delayed anyway as it was supposed to have launched at the end of 2019. Currently Nord Stream 2 AG is claiming the pipe will be ready by the end of 2020 or the first quarter of 2021. Without a decision from the EC, the company will not be allowed to transmit gas. A similar scenario may pertain to the derogation procedure in which PGNiG will participate. This may happen if Poles manage to secure a guarantee that the transmission will not start until the procedure is over. Such a situation took place during the dispute regarding the derogation of the German section of the Nord Stream 1 pipe (i.e. OPAL pipeline), which until the PGNiG guarantee was in force, Gazprom could use only at a reduced capacity.
In this scenario the procedure will take time rendering Nord Stream 2 useless and making it a burden on NS2 AG budget, a company that is completely owned by Russia’s Gazprom. The fact that the Gas Directive makes it possible for other projects to use the derogation may suggest the Russians will lose the dispute. However, they will most probably argue their project is discriminated against and allege that the amendment was in fact “lex Nord Stream 2” – a piece of legislation specifically designed to undermine their investment. However, the reality is that it is Gazprom that does not want to play by the rules and instead tries to keep its privileged position on the European market, a position it has abused at a number of occasions, the issues with the infamous Yamal contract with Poland being one example, which was confirmed during an EC antitrust investigation.
Germany’s proceedings around Nord Stream 2 will not only hurt this country, but also European common policy as a whole from a security point of view. Additionally, they are undermining Germany’s already-fragile position as the European mediator and dealmaker.