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Nord Stream 2 Loses Case For Exemption From EU Directive In Yet Another Hurdle

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Nord Stream 2 Loses Case For Exemption From EU Directive In Yet Another Hurdle

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Nord Stream AG, the operator of Nord Stream 2, lost the court case to exempt the Nord Stream 2 gas pipeline project from the requirements of the EU Gas Directive.

According to media reports, Düsseldorf Higher Regional Court rejected a complaint from Gazprom to overturn the decision of the Federal Network Agency of Germany.

Nord Stream 2 AG previously appealed in German courts against the refusal to satisfy the request to exempt Nord Stream 2 from the provisions of the Gas Directive. A lawsuit has also been filed to repeal the amendments to the Gas Directive in the EU Court of Justice.

The updated EU gas directive has brought under its own rules not only onshore, but also offshore sections of gas pipelines in the EU. Among other things, the directive requires that the pipeline entering the EU is either partially filled by an alternative supplier, or part of it, which runs through the Union, belongs to a third company.

The EU rules require the companies that produce, transport and distribute gas on European Union territory to be separate, or “unbundled”. They aim to ensure fair competition in the market and to prevent companies from possibly obstructing competitors’ access to infrastructure.

The Nord Stream 2 operator claims the rules, amended in 2019, were aimed at torpedoing the pipeline. The project is strongly opposed by many European governments, some of whom see it as a Russian state venture designed to increase the bloc’s dependence on Russian gas.

Nord Stream 2 is a pipeline from Russia to Germany with a total capacity of 55 billion cubic meters of gas per year; it is almost completed. For most of the project’s existence, it was actively opposed by Ukraine, which fears the loss of revenues from transit, as well as the United States, interested in promoting its LNG to Europe.

Earlier, Berlin and Washington issued a joint statement in which they noted that for its implementation, it is necessary to ensure the supply of gas to Ukraine after 2024.

In turn, Germany has pledged to seek sanctions from Brussels against Russia if Moscow uses energy exports as “an instrument of political pressure.” At the same time, the Russian side has repeatedly noted that Nord Stream 2 is an exclusively commercial project that is beneficial to the European Union.

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