Nord Stream 2 Now Facing The Regulators

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Nord Stream 2 Now Facing The Regulators

Wed, 09/22/2021 - 08:45
Flags of Rosneft and Russia (copyright by Shutterstock/FotograFFF)
Flags of Rosneft and Russia (copyright by Shutterstock/FotograFFF)

The painful birth of Nord Stream 2 has not gotten any easier with the placement of the last pipeline segment on the Baltic seabed. For now Moscow has to reckon with unbundling legislation of the European Parliament, which states that Russia must separate the operator of the pipeline from the entities supplying the gas.  Further any supplier wanting to ship gas through the pipeline must have the right and ability to do so — known as third party access. Finally, Nord Stream 2 would have to publish its tariff methodology for approval by the German regulator, the Bundesnetzagentur.

Gazprom is seemingly not pleased with meddlesome European regulations and reportedly asked for a ten year compliance exemption, which was summarily dismissed. But with some artifice another Russian state-owned oil and gas company, Rosneft, may be called upon as a Third Party to supply Nord Stream 2 with sufficient gas to fill the pipeline to capacity.  

Oil Price reports that "Rosneft had previously attempted to break this monopoly through its good relations with Moscow. To no avail. Over the years, the state-owned company has become the Russian energy industry’s poster-child due to its successes domestically and abroad. Rosneft’s CEO, Igor Sechin, is a confidant of President Putin and regularly does the state’s bidding by making investments that comply with Moscow's policies despite modest financial gains."

Further along these lines the Russian Energy Ministry is preparing a report on ending Gazprom’s export monopoly through NS2. According to Interfax, which cited Deputy Prime Minister Alexander Novak, Rosneft has applied for permission to use the remaining 50 percent of the pipeline.  it remains to be seen whether the EU will accept another Russian state actor in place of Gazprom.

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