Gazprom’s shunned Nord Stream 2 wins spat over EU pipeline rules

While the ruling is a win for Nord Stream 2, its impact may have been overtaken by events in Ukraine, which led Germany to withdraw its backing for the project.
Image: Andrey Rudakov/Bloomberg

Russia’s shunned Nord Stream 2 gas pipeline won a legal boost in its pre-war challenge against European Union rules that subjected all new and existing pipelines involving foreign suppliers to the EU’s energy market-opening requirements, after the bloc’s top court said its appeal can be heard.

While the ruling is a win for Nord Stream 2, its impact may have been overtaken by events in Ukraine, which led Germany to withdraw its backing for the project.

The Gazprom PJSC-owned pipeline project has been challenging EU legislation from 2019 that extended rules on natural-gas import infrastructure to cover all pipelines to and from the EU, including Nord Stream 2. The EU’s General Court in 2020 had rejected the claims as inadmissible.

The EU’s lower tribunal “was wrong to hold that Nord Stream 2 AG was not directly concerned by” the contested legislation, the bloc’s Court of Justice ruled Tuesday. It sent the case back to the General Court for a ruling on the substance of the case.

Nord Stream 2 was slated to double the capacity of the existing undersea route from Russian gas fields to Europe, but has been a major source of friction in trans-Atlantic relations for several years.

It was set to carry as much as 55 billion cubic meters of Russian gas per year to Germany across the Baltic Sea, and was ready to start full-scale deliveries in December despite U.S. sanctions. Approval from the German energy regulator and EU officials were the last hurdles for the project, but Germany reversed its support in February.

Gazprom said in May it would use part of the Nord Stream 2 infrastructure to serve clients at home. The gas producer said it plans to put the project’s onshore facilities in Russia to work in expanding supplies to customers in the northwest of the country.

© 2022 Bloomberg

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