Russia’s Nord Stream 2 looks to appeal court rulings

Author: Diane Pallardy

2020/07/24

LONDON (ICIS)--Developers of the Russian Nord Stream 2 natural gas pipeline have until 30 July to appeal an EU General Court ruling against allowing a derogation from third party access rules.

Nord Stream 2 had looked to the court to reverse a decision on applying EU access and unbundling regulations to pipelines connecting to the trading bloc from non-member states.

This came through amendments to the gas directive and made it less likely that Russian producer Gazprom will be able to secure full access to Nord Steam 2 after the link is completed.

The court said the case was inadmissible and that a derogation would need to be sought from a German authority.

In the ruling the court stated that Nord Stream 2 could request an exemption from Germany energy regulator BNetzA.

Wolfgang Peters, managing director of The Gas Value Chain Company, said: “I do not think that General Court’s decision, not least since dodging the bullet by hiding behind legalistic formalities, would weaken Nord Stream 2’s case.”

The developers can appeal the General Court’s decision by 30 July and take the case to the EU Court of Justice, which has the ultimate authority.

GERMAN LEGAL CHALLENGE

In May BNetzA refused to exempt Nord Stream 2 from third party access rules, a decision appealed by the project developers at the Higher Court of Justice in Dusseldorf during June.

The Dusseldorf court may then ask the EU Court of Justice to rule on the validity of the amended gas directive, according to Oxford Energy Institute researcher Katja Yafimava.

If changes to the directive are found to be valid, it is possible that the German court may oblige BNetzA to develop a regulatory regime that would reduce the directive’s negative on Nord Stream 2, Yafimava added.

Agata Loskot-Strachota, senior fellow at the Centre for Eastern Studies, said the EU General Court’s decision limits room for manoeuvre, as the project developers now have to deal solely with German institutions.

She said: “It somehow puts Germany and German decisions in the spotlight and as the case is already very controversial I would not expect any controversial moves by BNetzA.”