The Council of the European Union has approved amendments to the EU gas directive that could delay the construction of the controversial Nord Stream 2 gas pipeline.
Approved on April 15, the changes will allow the EU to apply new operation standards to Nord Steam 2. The pipeline, which is currently under construction, will transport Russian gas through the Baltic Sea to Germany, bypassing Ukraine.
The project has provoked serious concerns in Kyiv. Once Nord Stream 2 is completed, Russia can completely abandon gas transit through Ukraine, causing huge losses for the Ukrainian economy — around $3 billion or 2.5-3 percent of the country’s gross domestic product, according to Yuriy Vitrenko, executive director of Ukraine’s state-owned oil and gas monopoly Naftogaz.
The new directive will enter into force in 20 days. After that, gas pipelines going to the EU from third countries will work under the same rules as those pipelines which are located within the EU.
“We worked hard to find a compromise that would be acceptable to everyone, and I think we now have a good solution which will guarantee that we have a fair and competitive European gas market,” said Anton Anton, Energy Minister of Romania.
In order for Nord Stream 2 to start operating in the EU, it will have to meet stricter requirements than Russia’s previous gas pipeline project: Nord Stream 1, which has been operating since 2011.
First, the company that produces and sells gas cannot also transport it. Currently, Nord Stream 2 AG, a Swiss company created to manage the pipeline, does not comply with this requirement, since its main shareholder is Russian state gas monopoly Gazprom.
Second, third parties should have access to the Nord Stream 2 pipeline. In practice, this means that some of the transportation capacity should be available for other companies, and not just Gazprom, Deutsche Welle reports.
Additionally, competitive gas tariffs will be set by the German national regulator.
The European Commission proposed introducing such changes back in November 2017. However, throughout 2018, Bulgaria and Austria – both known to have pro-Russian governments – blocked the amendments while they chaired the Council of Europe throughout the year, says Oleksandr Kharchenko, director of the Energy Industry Research Center in Kyiv.
“They (Bulgaria and Austria) did nothing to promote this directive. The Romanians, who are in opposition to Nord Stream 2 and who are suffering just as (Ukrainians) are from a very powerful Gazprom… immediately raised this issue when they began to chair the Council of Europe,” Kharchenko told the Kyiv Post.
Huge doubts
But while the new requirements imposed by the Council of the European Union could potentially suspend the Russian gas project, some experts doubt that they will have a significant effect in practice
According to Taras Zahorodniy, a political-economic expert from National Anti-Crisis Group, the new changes in the gas directive will have zero effect since Germany is the main lobbyist for this project in the EU.
“Most likely, (Germany) will ignore the position of the European Commission under different precedents. Germany is the main shareholder of the EU. What is permissible for Jupiter is not permissible for a bull,” Zahorodniy said, quoting a famous Latin expression.
In other words, Germany can accomplish more than other EU members.
Berlin will use any legal means to find a solution, which can ultimately undermine European unity, Zahorodniy added.
“It’s too early to rejoice, and Ukraine should already perceive the world as it is – rigid and pragmatic,” he said.
