Ukraine will remain a transit. Implications of the decision on the Opal

Украина сохранит транзит. Значение решения по Opal

The EU court was not allowed Gazprom in Opal – land withdrawal North of the stream

Poland in the EU court sought cancellation of the resolution of the European Commission on the admission of Gazprom to the land drainage capacity of Nord stream.

The European court ruled in favor of Poland in the dispute on the admission of the Russian company Gazprom to the capacities of the Opal gas pipeline, which is the land allotment of Nord Stream, which runs from Russia to Germany under the Baltic sea.

The Russian company was not allowed to use Opal at full capacity, which will not allow it to abandon the gas transit through Ukraine. This reinforces the position of Kiev in the upcoming gas negotiations. Корреспондент.net tells details.

 

Ukraine has received a new trump card in negotiations with Gazprom

Energy Poland on 10 September reported that the European court overturned a European Commission decision granting Gazprom the right to use the Opal gas pipeline at 100 percent.

The Opal pipeline’s capacity of 36 billion cubic meters a year, it connects Nord stream with the gas transmission system in Central and Western Europe. The owner Opal is the company WIGA Transport Beteiligungs-GmbH is a joint venture of the German Wintershall Holding GmbH (50.02 per cent) and Gazprom (49,98 percent).

In 2013 Russia was able to use half of the capacity of Opal, three years later – is 90 percent. Ukrainian company Naftogaz warned that because of this, Ukraine could lose up to $ 425 million in annual transit revenues.

The decision, which effectively allowed Gazprom to increase pumping and Opal, respectively, Nord stream to 10.7 billion cubic meters a year, has also drawn sharp criticism from Poland, which is also a transit country.

The Polish government has requested for cancellation of the decision of the regulator and its suspension in December 2016. With a similar lawsuit at the same time made PGNiG Supply & Trading GmbH (German structure of the Polish PGNiG).

In both cases, the plaintiffs requested to impose interim measures and to forbid Russian companies to participate in auctions on the distribution of 40 percent of the capacity of Opal, to which Gazprom was able to access.

In the state oil and gas company PGNiG of Poland said that the decision of Evrokomisii from 2016 on connecting Gazprom to 90 percent capacity Opal, which was challenged, was taken in violation of the legislation of the European Union.

“The Commission has not studied, in particular, the impact of the solution on the gas markets of Poland, Lithuania and Latvia or any other country of Central Europe… We are very pleased that the European Court of justice clearly confirmed that EU rules apply equally on all, including for the Russian Gazprom”, – said the Chairman of the Corporation Peter Wozniak.

The head of the Ministry of energy in Poland Krzysztof Tchorzewski noted that the court’s decision “will put an end to the monopoly of Gazprom in Europe,” and will not allow Russian companies to completely abandon the transit of gas through territory of Ukraine.

Due to restrictions on the use of the Opal gas pipeline, Gazprom will have to reduce the loading of Nord stream, which according to the Minister, reduces the likelihood of a serious gas crisis in Ukraine, which could strike at other countries in the region, including Poland.

He also stressed that the decision of the Court of justice is of great importance in prospect of the approaching end of the contract of transit of Russian gas through Ukraine, which is valid until 31 December 2019.

In turn, the Executive Director of Naftogaz of Ukraine Yuriy Vitrenko has called the court’s decision is a pleasant surprise.

At the end of the year expires a ten-year contract for the transportation of Russian gas to Europe via Ukraine.

Not having signed a new contract, Naftogaz boosts gas reserves and is leading the upgrade of multiple compressor stations in case Russia again cut off gas supplies, as it was ten years ago.

Naftogaz and Gazprom with the participation of the EU continue negotiations on the renewal of gas contracts.

Trilateral gas talks between the European Commission, Ukraine and Russia will be held in Brussels on 19 September. Several rounds of negotiations on the extension of the Russian transit through the Ukrainian gas transportation system has not yet yielded results.

The EU has declared its readiness to mediate in negotiations between Kyiv and Moscow to resolve the current problems of gas supply, and determine the future of Russian gas transit through Ukraine.

In early June, Russia put the conservation of gas transit to the EU via Ukraine. Russian Prime Minister Dmitry Medvedev said that the new cooperation should be based on “normal commercial relations” and the absence of litigation.

Experts said that due to the delay of construction of the Nord stream-2 is necessary for Russia the contract on gas transit through the Ukrainian GTS. Detail in the material Корреспондент.net gas Transit: the Russian Federation has put forward Ukraine new conditions.

Later, the head of Gazprom Alexey Miller has threatened European gas consumers because of the expiry of the transit contract with Ukraine and Ukrainians – the loss of reverse of Russian gas from the European Union. However, experts say that the plan of Russia to leave Ukraine without a transit failed.

 

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