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    EC Seeks Mandate for Nord Stream 2 Talks with Moscow


The EC has requested approval from the Council of the European Union to negotiate with Moscow the rules for the Nord Stream 2 gas pipeline project.

by: William Powell

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EC Seeks Mandate for Nord Stream 2 Talks with Moscow

The European Commission (EC) has requested approval from the Council of the European Union to negotiate with Moscow the key principles for the operation of the Nord Stream 2 gas pipeline project, it said June 9.

It is expecting strong opposition to the line, which not only does not represent diversification of supply for the European Union, but also weakens the role of existing transit countries such as Ukraine.

Poland, another transit country for Russian gas, is particularly opposed to Nord Stream 2, and a former Polish prime minister Donald Tusk wrote to urge the European Council not to allow the line to be built in a letter leaked earlier this week. Tusk is president of the Council of the EU.

EU vice-president for the energy union Maros Sefcovic said: "Creating a well-diversified and competitive gas market is a priority of the EU's energy security and Energy Union strategy. As we have stated already several times, Nord Stream 2 does not contribute to the Energy Union's objectives. If the pipeline is nevertheless built, the least we have to do is to make sure that it will be operated in a transparent manner and in line with the main EU energy market rules."

EU climate action and energy commissioner Miguel Arias Canete said: "As any other infrastructure project in the EU, Nord Stream 2 cannot and should not operate in a legal void or according to a third country's energy laws only. We are seeking to obtain a Council mandate to negotiate with Russia a specific regime which will apply key principles of EU energy law to Nord Stream 2 to preserve the functioning of the European internal energy market."

In a long statement intended to address the concerns of Poland and other countries opposed to Nord Stream 2, the EC conceded that Nord Stream 2 did not widen the bloc's range of suppliers and that it did allow a single supplier to strengthen its position in the EU gas market, but it did also remind its readers of diversification measures already in place, such as LNG import terminals, storage, interconnectors, the rise of hubs as market price indicators, and the planned Southern Gas Corridor. All these weaken Russia's ability to use gas as a lever to weaken European economies.

While any onshore pipeline to transport the gas coming through Nord Stream 2 in Europe would have to be in full compliance with the EU energy rules under the so-called Third Internal Energy Market legislative package, the offshore section of the pipeline is in a specific situation given that part of it, including its only Russian entry point lies outside the EU jurisdiction. Therefore the EC asks the Council of Ministers for a mandate to negotiate a special legal framework, which would take into account fundamental principles stemming from international and EU energy law.

These principles include non-discriminatory tariff-setting, an appropriate level of non-discriminatory third party access and a degree of separation between activities of supply and transmission, it said.

Gazprom remains a vertically integrated gas producer and transporter and marketer and has a monopoly on pipeline exports, controlled by Moscow. Last week BP and Rosneft signed a strategic agreement that seeks to subvert that monopoly; but both acknowledge that the Kremlin has the final say on use of Gazprom's pipelines and that to date these remain closed to any other would-be exporters.


William Powell