Ukraine’s GTSOU joins Naftogaz in Nord Stream 2 certification application

KYIV (ICIS)–Ukrainian gas grid operator GTSOU said in a statement on Wednesday it has joined incumbent Naftogaz and Polish state company PGNiG in filing an application to take part in the certification of the Nord Stream 2 pipeline.

Speaking to ICIS on the sidelines of the Ukraine Gas Investment Congress in Kyiv, Myron Wasylyk, advisor to the Naftogaz CEO, said the incumbent and GTSOU’s applications to German regulator BNetzA were in line with German energy legislation, which allows parties with vested interests to join the certification process.

Naftogaz and GTSOU have been strongly opposed to the completion of Nord Stream 2, which is expected to carry 55 billion cubic metres of gas annually to Germany and is expected to absorb volumes currently transited via Ukraine.

Earlier this year, Nord Stream 2 filed a request for certification under the independent transmission operator model (ITO), but Polish incumbent PGNiG as well as EU representatives raised subsequent questions about the choice, noting that it was available only to grid operators that existed before 23 May 2019 when EU rules were amended.

“As an ITO, Nord Stream 2 will remain within the Gazprom Group, a vertically integrated energy undertaking, contrary to current European law. The certification procedure shall ensure compliance with European energy law, and, when the proposed operator is controlled by a non-EU entity (in the present case Russian Gazprom), ensure that certification does not threaten security of supply,” GTSOU said in the statement.

The grid operator said it had a direct interest in ensuring Nord Stream 2 was fully compliant with EU rules for transparency and third-party access, noting that the certification of the pipeline under the ITO model would “undermine” security of supply for Ukraine and hamper the country from operating and maintaining the storage and transmission system.

Gazprom, however, has recently argued that full compliance with EU regulations would render it bankrupt.

In August, the Dusseldorf Higher Regional Court ruled that the EU third energy package would apply to the Nord Stream 2 pipeline.

The court dismissed a challenge by the pipeline operator and upheld a ruling by Germany’s Federal Network Agency BNetzA in May 2020 which aimed to prevent infrastructure owners from obstructing access to their assets.