Poland Launches Legal Challenge to Nord Stream 2

The European companies that are Russia’s partners in the project face steep fines.

The skyline of Warsaw, Poland
The skyline of Warsaw, Poland (Unsplash/Alexey Topolyanskiy)

Poland’s antitrust watchdog has begun legal proceedings against Gazprom and the five European companies that are its partners in Nord Stream 2. The regulator alleges that completion of the Baltic Sea pipeline would inhibit competition.

EurActiv reports that the companies — Anglo-Dutch Shell, Austria’s OMV, Switzerland’s Engie and Germany’s Uniper and Wintershall — face fines of up to 10 percent of their annual turnover.

Political pipeline

EU authorities share Poland’s view that Nord Stream 2, which would double the existing pipeline’s capacity, is at best unnecessary and at worst a threat to the bloc’s interests.

Russia is believed to use just 60 percent of its overall pipeline capacity to transit natural gas into Europe.

The reason for building Nord Stream 2 is not commercial but political: to bypass Ukraine. Russia believes it would be able to once again blackmail its former satellite state if it could pipe gas directly to Western Europe.

If completed, the Nord Stream network could carry 80 percent of Russia’s gas exports to Europe.

The EU as a whole receives around a third of its gas from Russia. Russia sells 90 percent of its gas to Europe.

Isolated

Austria, Germany and the Netherlands are isolated in Europe in their support for the project.

Chancellor Angela Merkel recently hardened her position, saying Nord Stream 2 can only go ahead if Ukraine’s role as a transit country is protected.

But German regulators have already signed off on the extension.

EU action

The European Commission has done more.

It has forced Gazprom to allow third-party access to its electricity and gas distribution network in Europe and barred it from including destination clauses in its contracts, enabling Russia-friendly countries, like Germany, to resell gas to former communist states in Central and Eastern Europe.

Energy experts believe the combined effect of these measures has been to turn the tables on Russia and make it more dependent on Europe than Europe is on Russia. Nord Stream 2 could tip the balance the other way again.