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Russia-led Nord Stream 2 Asks EU Court To Annul New Gas Rules

Nord Stream 2 AG, the company building the controversial Gazprom-led natural gas pipeline project, is challenging the new European Union (EU) gas rules, asking a court to annul them because, Nord Stream 2 says, they are discriminatory.

The Nord Stream 2 pipeline—which is planned to twin the existing Nord Stream pipeline between Russia and Germany via the Baltic Sea—is opposed by the EU institutions and some EU members, not to mention U.S. lawmakers, as it would allow Russia to further boost its natural gas supplies to Europe.

In February this year, the EU amended the so-called gas directive, extending the rules of the EU’s internal gas market to apply to natural gas pipelines to and from third countries, which would include Nord Stream 2 in this extended scope of the rules. The main elements of the gas market rules in the EU include ownership unbundling, giving access to third parties, non-discriminatory tariffs, and transparency requirements. The Nord Stream 2 pipeline will be owned and operated by Russia’s gas giant Gazprom, which would be in violation of the directive extended to pipelines to and from the EU.

Nord Stream 2 AG said on Friday that it had brought action for annulment of the amendment to the Gas Directive before the General Court, because it says the measures extended to pipelines to and from the EU are ‘discriminatory.’

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“The amendment was clearly designed and adopted for the purpose of disadvantaging and discouraging the Nord Stream 2 Pipeline,” Nord Stream 2 AG said.

“We as a prudent investor are committed to protecting our investments. But the amendment to the Gas Directive is not only harmful to Nord Stream 2. Such obvious discrimination against an individual commercial investment also undermines the ability of the EU’s internal market to attract investments for making the energy transition a reality”, Nord Stream 2 AG chief executive Matthias Warnig said in a statement.  

Nord Stream 2 also “reserves the option to defend its rights under international law by proceeding separately with arbitration against the EU pursuant to the investment protection guarantees of the Energy Charter Treaty (ECT),” the company said today.  

Meanwhile, a U.S. Senate committee will now not vote until next week on a bill that seeks to levy sanctions on companies and individuals involved in building the Nord Stream 2 pipeline.

By Tsvetana Paraskova for Oilprice.com

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