Gas politics

Poland Roadblocks Nord Stream 2

NordStream 2 blocked by Polish regulators. Source: dpa
Nord Stream 2 blocked by Polish regulators.
  • Why it matters

    Why it matters

    Eastern European nations say that Nord Stream 2 will mean Russia can blackmail them by shutting off gas supplies, without affecting Western Europe, while others warn that the project will cement Western Europe’s dependence on Russian gas.

  • Facts

    Facts

    Nord Stream 2 was designed to bring gas from Russia into Europe.

    Europe uses Russian gas to meet about a third of its energy needs.

    Nord Stream 2 is expected to be completed by 2019.

  • Audio

    Audio

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Russian gas giant Gazprom must rethink its strategy for its Nord Stream 2 project, designed to pump gas from Russia to Europe, after running foul of Polish anti trust regulators.

Gazprom had brought on board German companies Wintershall and Uniper, the Anglo-Dutch oil company Shell, the French energy company Engie, and the Austrian oil company OMV, but all parties pulled out after Polish watchdogs delayed the project.

Insiders from the affected companies say they believe the anti-trust proceedings in Poland have been deliberately dragged out and therefore felt there was no option but to formally pull out of the project.

Nord Stream 2, a company wholly owned by Gazprom, will now continue on its own. But, Gazprom said in a statement, they are looking for alternative ways for joint venture partners to contribute to the project.

“We won't be incorporated into Nord Stream 2, but we are still keenly interested in the execution of the project and we remain partners.”

Wintershall spokesman

Since 2011, Gazprom has been pumping natural gas from Siberia to Western Europe through the 1,200 km long Nord Stream pipeline. Germany receives 55 billion cubic meters annually via this channel. Gazprom began Nord Stream 2 because it wants to double capacity, but it wants to bring Western investment partners on board.

But Nord Stream 2, like the first Nord Stream project, is politically sensitive. E.U. politicians, especially in Eastern European nations, fear that Europe will become dependent on Russian gas. Concern is also mounting that Nord Stream 2 will render obsolete the pipeline which currently brings gas to Europe through Ukraine.

The pipeline will not go through Poland, but Polish competition authorities have the right to rule on the project because some of the proposed partners have assets in Poland.

The project partners now say they’ve decided to withdraw their merger notification from the Polish competition authorities. At the same time, they said in a statement that all applicants believe the project is crucial for the European energy mix, and that each of them is looking at alternative ways to contribute to the project’s implementation.

“The decision of the applicants to withdraw their notification will have no effect on the planned construction of the Nord Stream 2 pipelines, or the associated timeframe for completion.”

“We won’t be incorporated into Nord Stream 2,” a spokesman for Wintershall told this newspaper, “but we are still keenly interested in the execution of the project and we remain partners.”

The companies agreed to the joint venture a year ago. The Western partners were to hold stakes of around 10 percent each, with Gazprom holding the majority stake. The German anti-trust authorities approved the project at the end of 2015.

Jürgen Flauger covers the energy market for Handelsblatt, including electricity and gas providers, international market developments and energy policy. To contact the author: flauger@handelsblatt.com

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