Poland’s PGNiG sues Brussels over Opal deal with Gazprom

By bne IntelliNews December 5, 2016

PGNiG has launched a legal challenge to the European Commission’s decision to offer Russian gas exporter Gazprom increased transmission capacity on the German Opal pipeline that brings exports sent through the Nord Stream route on land, the Polish state-controlled oil and gas company said on December 5.

Warsaw argues that giving Russia more transmission capacity runs counter to EU solidarity on energy security. Poland has long feared that the more gas Gazprom can pump directly to Germany, the more leverage it will have over Central & Eastern European states across which exports to the west currently run.

PGNiG filed a legal complaint with the European Court of Justice on December 4, the Polish company said. As many as 14 charges have been filed.  

PGNiG has also pledged to launch legal action against the German energy regulator. The Polish company has demanded the effects of the controversial decision be suspended.

While PGNiG did not say what the charges were exactly, it said giving Gazprom more of Opal’s capacity violates EU regulations concerning competition on the European natural gas market, as well as regulations on legal certainty, protection of third parties and proportionality. The terms of the association agreement between the EU and Ukraine are also being broken, the Polish gas utility says.

PGNiG also complains that the commission is yet to publish the details of the decision, which has kept market participants in the dark.

“No other market participants apart from Gazprom have had the opportunity to read the commission’s decision, which is of fundamental significance in the deterioration of conditions for competition on the gas market and, most importantly, impacts the security of gas supplies to Central and Eastern Europe,” PGNiG said.

"[The commission and the Germany energy regulator] are destroying the development of the competitive gas market and expanding the privileges enjoyed by Gazprom, which can in turn lead to the Russian company acquiring a monopoly in the supply of gas to Central and Eastern Europe,” CEO Piotr Wozniak said in a statement. “This is a serious threat to the security of gas deliveries to Poland and the entire region."

Opal lands the gas sent via the 63bn cubic metre Nord Stream, allowing transmission across Germany and on to the Czech Republic. Currently, Gazprom is limited to using 50% of Opal's 36bn cm capacity, with the remainder auctioned to third parties. The EU announced last month that it will now allow the Russian company to potentially compete for a further 30-40%.

Critics claim Russia may now reroute the gas it supplies to Europe, bypassing Ukraine, and also possibly some small volumes crossing Poland. The European Commission said it would seek guarantees that Gazprom will maintain gas transit through Ukraine after 2019. Moscow has said it plans to cut all Ukrainian transit, and is pushing to build new routes via Turkey, as well as adding a second line to Nord Stream.

Warsaw has also expressed its disappointment over speculation Gazprom could dodge a large fine from Brussels as the Russian company talks over a deal to bring a four-year anti-trust case concerning its contracts with several CEE member states to an end. Polish Energy Minister Tchorzewski claims the EU’s soft stance on Gazprom could also affect Polish plans to sell gas - imported via a new LNG terminal and planned pipeline linking to PGNiG’s Norwegian gas fields - to southern Europe.



Related Articles

Turkey and Israel aim to ink natural gas pipeline deal by end-2017

Turkey’s Energy Minister Berat Albayrak, son-in-law of President Recep Tayyip Erdogan, is set to visit Israel by the end of this year to conclude an agreement to construct a natural gas pipeline ... more

Polish utility Tauron places €500mn eurobond issue

State-controlled Polish power firm Tauron has sold €500mn worth of eurobonds, the company said on July 5. Tauron needs capital to refinance the costs of construction and the purchasing of a ... more

Hungary signs deal to link to Russia's Turkish Stream gas pipeline

Budapest has signed a deal with Russia's Gazprom to link Hungary with the under-construction Turkish Stream ... more