EU Commission Passes Nord Stream 2 Buck To Member States

By Georgi Gotev

(EurActiv) — The Commission asked the member states on Friday (9 June) for a mandate to negotiate with Russia an agreement on the Nord Stream 2 gas pipeline project. The company in charge of the Gazprom-favoured pipeline reacted with dismay, saying the procedure is unnecessary.

The European Commission announced that it is seeking a mandate to negotiate with the Russian Federation on the operation of the Nord Stream 2 gas pipeline project.

In particular, legal certainty is needed regarding the off-shore section of the pipeline, given that part of it, including its only entry point, lies outside the EU jurisdiction. The Commission’s legal services say internal market legislation does not apply to the offshore sections of Nord Stream 2.

The Nord Steam 2 project says the EU’s Third Energy Package doesn’t apply to the pipeline, while the EU executive says it applies to the onshore section, and that the legal void.concerning the offshore section should be filled.

Poland, the Baltic states and others, including Denmark, argue that Nord Stream 2 would increase the European Union’s dependence on Russia’s Gazprom, which already supplies about a third of the bloc’s gas.

This new route, coupled with the Turkish Stream project, is also aimed at bringing Russian gas to the EU by bypassing Ukraine and robbing the former Soviet Republic of transit tax revenues.

Nord Stream 2 and Turkish Stream would also siphon off revenues from EU members Poland, Slovakia, the Czech Republic, Romania and Bulgaria.

Supporters say Nord Stream 2 means cheaper gas supplies for Europe. Gazprom’s European partners in the project project include Germany’s Uniper and BASF/Wintershall, Austria’s OMV, UK’s Shell and France’s Engie.

The idea that the Commission should negotiate Nord Stream 2 on behalf of the member states is not new. The Commission’s concern is that the pipeline cannot be operated in a “legal vacuum”.

A few days ago Council President Donald Tusk wrote to Commission President Jean-Claude Juncker, informing him he has a negative view of the project and that it would not serve the EU’s best interests.

Asked by EURACTIV to explain how the decision by member states will be taken, Commission spokesperson Alexander Winterstein confirmed that this would be by qualified majority vote.

This means that for the Commission to take charge, at least 16 out of 28 member states would have to vote in favour. The proposal has to be supported by member states representing at least 65% of the population.

It appears that Nord Stream 2’s critics will be outvoted and the Commission will take charge.

The executive admitted in its press-release that Nord Stream 2 does not contribute to the Energy Union’s objectives of giving access to new supply sources, routes or suppliers.

It also acknowledged that it could allow a single supplier to further strengthen its position on the EU gas market and lead to a further concentration of supply routes. The Commisison also highlighted that there is existing, well-functioning gas transportation infrastructure in place to ensure Europe’s energy supply.

“Building Nord Stream 2 would, at the same time, endanger existing transport routes, notably via Ukraine,” the EU executive notes.

Nord Stream 2 not happy

Nord Steam 2 published a press release, calling the Commission claims “politically motivated” and “entirely unnecessary”.

“There is no need for an international agreement between the EU and the Russian Federation on Nord Stream 2”, the company states.

“A specific framework just for Nord Stream 2 would discriminate against an individual commercial investment, based on political sentiment. It is unacceptable that among other comparable pipeline projects the European Commission, as the guardian of the EU Treaties, has singled out Nord Stream 2 for a special political treatment. This infringes against the principle of equal treatment, which is a constituting element of the EU Founding Treaties”, the statement reads.

It remains unclear what would be the Russian position, in case the Commission obtains a mandate. The Nord Stream 2 company warns that in case negotiations would be conducted, the possible results of such negotiations would need to be approved by the member states and the European Parliament.