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The Nord Stream 2 operator’s defeat. How the decision will affect Gazprom and Ukraine

The Dusseldorf Higher Regional Court dismissed the claim of the Swiss subsidiary of the Russian Gazprom, Nord Stream 2 AG, that operates the Nord Stream 2 gas pipeline, against the decision of the Federal Network Agency Bundesnetzagentur not to exempt the pipeline from the EU gas directive. The Page explains what this means for Gazprom and Ukraine.

According to the outlet DW, Gazprom can still appeal the judgement in the Federal Court of Justice of Germany in Karlsruheand in the Court of Justice of the European Union in Luxembourg. However, Nord Stream 2 AG will not be able to get certified as an independent operator if it does not fulfill such conditions as taking the latter out of Gazprom's control and transferring it to an independent company; the new company will have to keep less than 50% of the Nord Stream 2 capacity empty for other potential customers, as well as operate at tariffs for gas transportation through German territory that will be set by the German Federal Network Agency.

According to liga.net, this is beneficial for Ukraine, since our country insisted on this during the talks between the Ministers of Energy of Ukraine, the United States, and Germany, and the compliance of the gas pipeline was discussed as one of the compromise steps for its launch and guarantees of continued transit through the territory of Ukraine.

At the same time, ZN.ua recalls the decision of the EU Court of Justice in Luxembourg of July 15, 2021 on the OPAL gas pipeline branch from the first Nord Stream that also limited Gazprom in using the branch pipeline to 50% of its capacity. The outlet writes that both decisions mean restrictions on using two gas pipelines from 110 billion cubic meters of total design capacity to 65 billion cubic meters—Nord Stream 1—37.5 billion cubic meters/per year, Nord Stream 2—27.5 billion.

"If the European institutions are able to force Gazprom to comply with the decisions of the courts, the Ukrainian gas transportation system will maintain the existing status quo. And if it is still possible to apply the principle of energy solidarity in the format of the Energy Community Treaty, then it is possible to limit the use of the second string of the Turkish Stream across Europe, and after that it is even possible to slightly increase the volume of gas transportation through the territory of Ukraine in the case of an increase in European demand. But if these restrictions do not work, it will mean that in fact the full power in the EU belongs not to the European Commission, the European Parliament, and the EU Court, but to a separate state-owned company from a non-EU country," the article reads.

Context. Earlier, the United States and Germany officially agreed to complete the construction of Nord Stream 2.

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