EU states split on Commission mandate for Nord Stream 2

EU states split on Commission mandate for Nord Stream 2
The commission has struggled to find legal objections to the Nord Stream 2 project. / Photo: CC
By Tim Gosling in Prague June 27, 2017

Thirteen of the 28 EU member states gave their backing on June 26 to a request from the European Commission for a mandate to negotiate with Russia over the Nord Stream 2 gas pipeline project.

The EU executive is seeking the power to deal with Moscow on the controversial project, a request that was discussed at a meeting of EU energy ministers. With Germany leading a group of countries whose companies are taking part in building the 55bn cubic metre a year (cm/y) route, the commission has struggled to find legal objections to the project, which Central and Eastern European states claim will deepen dependence on Russian supplies, which is widely viewed as a geopolitical risk. The existing Nord Stream 1 pipeline transports 55bn cm/y of Russian gas from the Bovanenkovo field in North Russia’s Yamal Peninsula under the Baltic Sea into Germany, avoiding the need for Russia to use what it regards as hostile transit states Ukraine and Poland.

The EU now appears to have given up on finding a way to apply its regulations to the offshore section of the pipeline. However, it still has the power to oversee the link bringing the gas delivered onshore, and appears to hope it can delay the project with red tape long enough to find a way to derail Russian efforts to circumvent the rules after 2019, when new talks over transit are due.

“Just presented our proposal on Nord Stream mandate to EU energy ministers,” EU Commission Vice-President for Energy Union Maros Sefcovic wrote on Twitter. “First debate showed strong support for our approach.”

However, less than half of the member states stated support the proposal at the informal meeting, according to Reuters. An official vote is expected in the autumn. The commission’s proposal found support from Italy as well as Nordic, Eastern European, and Baltic states, the EU said.

Yet many states have yet to take a stand. "It is quite toxic. Many member states are quite wary of advertising their position," one diplomat told Reuters.

The entry of the US into the debate in recent weeks has muddied the waters further. Washington recently raised additional sanctions against Russia over interference in last year’s presidential election. Additional measures announced against Nord Stream 2 provoked fury in Berlin and Vienna, both of whom have major energy companies involved in a consortium working on the gas pipeline to Germany. As well as largest shareholder Gazprom, Nord Stream 2 also comprises ENGIE, OMV, Shell, Uniper and Wintershall.

That only widens the EU split on the project, which even within the Central Europe region is also fragmented.

On the one hand, Poland – which is the most committed hawk on Russia in the EU – called for the suspension of permits for Nord Stream 2 while the bloc deliberates. “It's even more important given that Russia is still subject to EU sanctions,” Polish Deputy Energy Minister Michal Kurtyka said.

However, Poland’s partners in the Central European bloc are less committed. Hungary has long been Russia’s closest ally in the EU, and hopes to benefit as a transit state for Russian gas flowing to the Balkans.

The Czech Republic has twin motivations to hope the project is built: the country stands to become a European gas hub as the supplies arriving via Nord Stream 2 would flow directly from Germany to the country. At the same time, Prague has spent the past few years seeking to cement closer ties with Berlin.

Slovakia, which had risked losing millions annually from shipping Russian gas that arrives via Ukraine to Europe, had previously objected to the scheme. However, Bratislava signed a new transit deal with Russian gas giant Gazprom in April that will see its revenues guaranteed even if Russia succeeds in circumventing Ukraine’s transmission system.

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