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EU court dismisses Nord Stream 2's challenge to EU gas unbundling rules

The General Court of the European Union has dismissed Nord Stream 2’s project developers challenge of the EU unbundling regulations. According to the court, the amended European gas directive does not directly apply to the Nord Stream 2 gas project. In addition, the enforcement of the EU rules is a responsibility of national regulatory bodies.

Earlier in May 2020, the German regulator (Bundesnetzagentur) had refused to grant a derogation from EU unbundling regulations to Nord Stream 2 operators for the section of the gas pipeline located in Germany. According to the regulator, the project did not qualify for exemptions as it was not completed before the 23 May 2019. The developers consider that the project is "economically functional" since they started to invest in the gas pipeline. 

In November 2019, the German parliament modified the Energy Industry Act to transpose the European Gas Directive that was amended in April 2019. Most notably, the European regulation requires gas pipelines not to be owned directly by gas suppliers except if they were built before May 2019. It also requires making available at least 10% of the gas pipeline capacity to third parties. This rule applies to all pipelines used to import gas into the European market, including from non-EU countries.

A consortium associating Gazprom (50%), Uniper, Shell, OMV, Wintershall, and Engie (10% each) is building the 1,220 km-long Nord Stream 2 gas pipe (two offshore strings with a capacity of 55 bcm). The project, which will double the throughput of the current Nord Stream route, is causing controversy as Germany increases its dependence on Russian gas while bypassing Ukraine. In January 2020, Russia postponed the commissioning of Nord Stream 2 from mid-2020 to the end of 2020 or early 2021, due to US sanctions against the gas pipeline that could delay the projects by several months.