“Gazprom” has achieved from the European Union concessions in the pipeline, depriving Ukraine of transit
“Gazprom” has achieved from the European Union concessions on the use of the German gas pipeline Opal, which due to the redistribution of transit can significantly reduce the role of Ukraine and Poland in this process, reports Reuters. On the eve of several European business publications reported that the Russian gas monopoly, was able to reach a compromise on a second issue that has disturbed relations with the European Union’s antitrust lawsuit that potentially threatened with fines of up to 6.5 billion dollars. I wrote about this “Vedomosti”.
Currently Gazprom has the right to 50% of capacity built in 2011, the gas pipeline Opal, which continues the pipeline “Nord stream” on the territory of Germany. The other half of the pipeline is idle, and the Russian monopoly has long been trying to fill right to capacity as its raw material. In 2013 “Gazprom” has agreed with the German network Agency Bundesnetzagentur full use of the Opal gas supply for Germany, but the agreement in 2014 is not approved by the European Commission, reminds “Kommersant”.
Now the German company acting as the operator of the Opal, has tightened the terms of the contract with “Gazprom”, and October 31, the decision must be approved by the European Commission. It is actually taken, says Reuters. Under the new terms, Gazprom will be able to claim a further 30-40% of the capacity of the pipeline – they will be put up for auction, and the Russian monopoly will be able to take part in it. Remaining 10-20% must be accessible to applications from other gas producers.
Sources of “Kommersant” in the market claim that the decision can be considered accepted, but finally, the EC wants “to bargain with Gazprom. It is not excluded that it will be about the time frame in which “Gazprom” will get access to the pipeline.
Polish gas company PGNiG has already expressed concerns about having access to nearly all of the Opal capacities, Gazprom will be able to suspend deliveries through Poland and Ukraine.
Reuters sources, however, claim that the agreement on Opal assumes the obligations of “Gazprom” for the preservation of transit through Ukraine after the expiration of the current contract in 2019.
“Nord stream” gas supplies from Russia to Europe under the Baltic sea. The output of the two threads with a length of 1224 km 55 billion cubic meters per year. The capacity of the Opal gas pipeline is 36 billion cubic meters a year.
A compromise in antitrust case
The second issue on which there has been progress, became the antitrust proceedings against Gazprom, ongoing since 2012, according to “Kommersant” and “Vedomosti”.
The European Commission accused the gas company, in hindering the diversification of gas supplies, unfair prices and limiting competition. The company attempted to divide the gas markets in the region, for example, preventing cross-border resale of gas. This allowed to raise gas prices in the Baltic countries and Bulgaria, with little infrastructure connecting them to other EU countries.
According to “Vedomosti”, the penalty in respect of violations of the Antimonopoly legislation of the European Union could reach 6.5 billion dollars.
The exact terms of the deal are still unclear: “Gazprom” is preparing to submit the final proposal to European officials. The sources of the Russian business Newspapers claim that we can talk about the promise of “Gazprom” allow re-export of gas to the EU. As reminds “Kommersant”, this has caused conflicts, for example, when Poland and Slovakia resell Russian gas to Ukraine, the monopoly cut supplies to Europe. In return, the European Commission will deliver a monopoly from the perennial threat of a fine in respect of restriction of competition by making the new terms binding.