An EU legal opinion has rejected a European Commission proposal to extend the bloc’s internal energy market rules to regulate Russia’s planned Nord Stream 2 gas pipeline to Germany.
The opinion is a blow to the EU executive’s push to stall Russia’s plan to double the gas it could pump under the Baltic Sea to Germany, bypassing traditional routes via Ukraine. The Commission fears the pipeline would undercut efforts to reduce dependence on Moscow and its support for Kiev.
The opinion, seen by Reuters, from the legal service of the Council of the European Union, the body where EU ministers meet, said applying EU rules to offshore pipelines may breach U.N. law regulating the seas.
The Commission last year proposed the changes to its gas directive to make all import pipelines subject to rules that require they not be owned directly by gas suppliers, apply non-discriminatory tariffs and make capacity available to third parties.
The Nord Stream 2 project, fully owned by Russia’s gas export monopoly Gazprom, is far from complying with the so-called third energy package rules.
The opinion, dated March 1, said the Commission’s proposal “lacks any reasoning on the regulatory power of the Union over offshore pipelines” crossing an EU nation’s exclusive economic zone (EEZ).
“The Union does not have jurisdiction to apply energy law ... which is unrelated to the economic exploitation of
the EEZ, to pipelines crossing the EEZ of Member States,” the Council’s legal service said.
Doing so would run counter to the United Nations Convention on the Law of the Sea as interpreted by the European Court of Justice, the document says, adding that additional analysis is needed on the matter.
The Commission’s moves to regulate Nord Stream 2, including by seeking a mandate from member states to negotiate directly with the Russian government, challenges big member states, who have companies invested in the project.
Five European energy firms are financing the 1,225 km (760 mile) pipeline to carry 55 Bcm of gas per year: German energy groups Uniper and Wintershall, Anglo-Dutch group Shell, Austria’s OMV and France’s Engie.
2023-07-19 - New IEA report depicts the U.S. boosting production and Europe’s high sensitivity to Russia’s gas supply.
2023-09-05 - CEO Bill Way has shifted Southwestern Energy’s course from Fayetteville founder to dual-basin natural gas powerhouse. Now the LNG sector’s top supplier aims to establish itself as the leading natural gas company in the U.S. with decades of inventory in the Haynesville Shale and Appalachian Basin.
2023-07-25 - Chevron’s oil and gas output from the Permian Basin reached record levels in the second quarter, surpassing analysts’ production and earnings estimates.
2023-08-20 - The U.S. Energy Information Administration sees natural gas output falling by 147 MMcf/d in September, but the Haynesville Shale and Appalachia region continue to pump out more gas than last year.
2023-08-24 - E&Ps have been expanding capital budgets, producing more ESG reporting and returning capital to shareholders and companies appear poised to return to M&A, a report by EY found.