Polish antitrust authority fines Gazprom over Nord Stream 2 gas pipeline probe

LONDON (ICIS)–The president of the Polish Office of Competition and Consumer Protection (UOKiK) has imposed a Polish Zloty (Zl) 213m (€48m) fine on Gazprom for failing to cooperate in an investigation into the construction of the Nord Stream 2 pipeline, UOKiK stated on Monday .

Nord Stream 2 will double Russia’s direct pipeline export capacity to the EU to 110 billion cubic meters (bcm)/year. This is roughly half the volume Gazprom plans to keep sending to Europe – its main export market – until 2030. The EU gets around 35% of its gas supplies from Russia.

UOKiK had said in an earlier statement that the actions of the six Nord Stream 2 investors may have been an attempt to circumvent EU antitrust law by establishing a company, Nord Stream 2 AG, to finance the construction of the project without the consent of the Polish antitrust authority.

Gazprom had not issued any statement at the time of writing, and so has been contacted for comment.

NORD STREAM 2 INVESTORS

The 55bcm/year project is financed by Gazprom and five European companies: French Engie, Dutch Shell, German Uniper and Wintershall and Austrian OMV. Gazprom provided half the €9.5bn financing of the project while the other half is equally shared between the five EU investors.

Initially, the six investors applied for approval to create a joint venture for the finance, construction and operation of the project, but withdrew their application after UOKiK voiced concerns that this could restrict competition and reinforce Gazprom’s dominant position in Poland, according to UOKiK .

Then, in April 2017, the six investors signed a contract under which they would share the financing of the project while Gazprom would be the sole owner of the pipe. But Gazprom failed to provide UOKiK with contracts concluded by its subsidiary with the other [EU] companies financing Nord Stream 2, UOKiK said.

“It is an intentional act, the aim of which was to obstruct the ongoing proceedings [UOKiK’s investigation]. Therefore, I have decided to impose a penalty of PLN almost 213m on Gazprom. It is the maximum sanction provided for by law, UOKiK president Tomasz Chrostny said.

In 2019, UOKiK imposed a Zl 172m (€39m) fine on Engie for failure to provide similar documents, but the other four EU investors cooperate and provided the documents requested by UOKiK, the authority said.

“For violating the prohibition against concentration without obtaining approval [from UOKiK], the companies are liable to a fine equal of up to 10% of their annual turnover. In addition, if the concentration was implemented and it is no longer possible to restore competition on the market, [UOKiK] may order the total or partial disposal of the company’s assets and shares granting control over the company, and even the dissolution of the company over which the companies concerned hold control,” UOKiK said.