The Nord Stream pipeline from Russia to Germany. Higher utilisation of Nord Stream-1 would indicate that there is demand on part of Gazprom for additional export capacity, for example Nord Stream-2, a leading expert has told New Europe.
Auctions for new partially regulated transport capacities of the German OPAL gas pipeline restarted on August 1 as the German Federal Network Agency (Bundesnetzagentur) lifted its ban in line with Court of Justice of the European Union (CJEU) and Düsseldorf Higher Regional Court.
This allows OPAL Gastransport, which operates the 470-kilometre pipeline running in a southerly direction from the Nord Stream landing point in Lubmin near Greifswald as far as the Czech Republic, to market the previously mostly unused OPAL capacities. Along the route, the natural gas pipeline with a transport capacity of 36 billion cubic metres of gas per year crosses the federal states of Mecklenburg-Vorpommern, Brandenburg and Saxony.
“Lifting the suspension of auctioning of OPAL’s non-exempted capacity, means that the 2016 EC exemption decision will remain in force at least until 2019, when CJEU is expected to make a judgement,” Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies, told New Europe on August 1.
She explained that restart of auctions, which were suspended for half a year as a result of provisional suspension by the courts of the 2016 European Commission exemption decision in response to Polish request, means that Russian gas giant Gazprom would be able to book at least 80% of OPAL capacity and potentially up to 100% should there be no interest from third parties thus allowing higher utilisation of capacity in Nord Stream-1.
“Gazprom would be able to do so at least until when CJEU makes a judgement in 2019. Should the CJEU uphold the 2016 EC exemption decision – which I believe it will – Gazprom would be able to continue to do so afterwards,” Yafimava said, adding that higher utilisation of Nord Stream-1 would indicate that there is demand on part of Gazprom for additional export capacity, for example Nord Stream-2.
Gazprom has been pushing for the construction for a second pipeline from Russia to Germany. Yafimava noted, however, that the European Commission could use it as an argument that Nord Stream-2 could be delayed, as Brussels wants to broker the deal safeguarding some transit across Ukraine.
“Lifting the suspension also assures Gazprom and its European buyers that irrespectively of arbitration ruling on the 2009 Ukrainian gas transit contract expected later in 2017, Gazprom would be able to use another route – Nord Stream-1 – to a higher degree,” Yafimava told New Europe.
The senior research fellow at the Oxford Institute noted that although perhaps coincidental, the timing of the Court of Justice of the European Union and the German court lifting the suspension thus enabling higher utilisation of Nord Stream-1 by Gazprom at the time when the United States “have engineered the sanctions bill aiming at curtailing Russian – existing and yet to be built – gas export capacity, is rather symbolic”.