Nord Stream 2: the consequences of the BNetzA decision

What does the decision of the German Federal Network Agency (Bundesnetzagentur, abbr.: BNetzA) mean for Nord Stream 2? PISM outlines some answers:

"The decision has no impact on NS2’s construction but the application of the Gas Directive in its fullest extent poses a serious challenge to Gazprom’s management of the pipeline. Instead, an independent operator will be required to manage it and access to the NS2 for exporters other than Gazprom should be granted as well, otherwise, the European Commission might ask the Court of Justice of the EU (CJEU) to limit Gazprom’s access to NS2’s total capacity. According to Russian law, Gazprom has a monopoly on gas exports via pipeline. The company is concerned that its competitors might take advantage of this situation and lobby for changes in the Russian legislation."

You can read the rest of the piece via the below link:

https://pism.pl/publications/German_Regulator_Denies_Derogation_for_Nord_Stream_2 

German Federal Network Agency: no derogation from gas directive for Nord Stream 2

https://www.bundesnetzagentur.de/EN/Service-Funktionen/RulingChambers/Chamber7/BK7-20-0004EN/BK7-20-0004EN.html?nn=269738The Federal Network Agency of Germany (Bundesnetzagentur) has decided in a decree yet to be published that it won't grant any derogation from the EU-Gas-directive to the controversial Nord Stream 2 pipeline:

"The Bundesnetzagentur has today rejected the application of Nord Stream 2 AG for derogation from regulation for the section of the Nord Stream 2 pipeline located in German territory.

Pipeline not completed

The section of a gas interconnector involving a third country located in German territory can be granted a derogation from regulatory requirements upon application and under certain conditions. For this, it is necessary that the gas interconnector was completed before 23 May 2019.

Since the Nord Stream 2 pipeline had not been fully laid by 23 May 2019, the Bundesnetzagentur has rejected the application for derogation made by Nord Stream 2 AG. When it is put into operation, therefore, Nord Stream 2 will be subject to German regulatory requirements and European rules on unbundling, network access and cost regulation.

The responsible ruling chamber of the Bundesnetzagentur understands the term "completion" in a constructional/technical sense. The applicant, by contrast, believes it to mean completion in an economically functional sense and refers to the investment decision, which was made well before 23 May 2019.

Nord Stream 2 AG can appeal and have today's decision examined before a court.

Responses to the proceedings

All European Union Member States had the opportunity to examine Nord Stream 2 AG's application, with its annexes, and to submit a response. Responses to the consultation were taken into account in the decision, as was the joint statement submitted by PGNiG S.A. and PGNiG Supply & Trading GmbH, which were summoned to the proceedings upon application in a decision of 18 March 2020.

Neither any of the Member States nor the parties summoned shared the viewpoint of Nord Stream 2 AG as regards the term "completion".

Background

Since the amendment of the Gas Directive 2009/73/EC, the European regulatory provisions have also applied to interconnectors between a Member State and a third country. The new European provisions were transposed in the German Energy Industry Act (EnWG), which entered into force on 12 December 2019.

Subject to the conditions of the amended section 28b EnWG, the section of a gas interconnector with third country involvement located in German territory is to be granted a derogation from regulatory requirements provided it was completed by the relevant date and the other conditions under subsection 1 of the provision have been met.

A version of the decision from which confidential information has been removed will be published shortly at www.bundesnetzagentur.de/BK7-20-004 under the file number BK7-20-004.."

More information to come on the site of the Bundesnetzagentur.

https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2020/20200515_NordStream2.html;jsessionid=D3E9ED2D32B0B4F2C4D2206AFCD3B401?nn=265794