Russia’s Nord Stream-2 project faces difficulties

Oil&Gas Materials 25 July 2016 14:26 (UTC +04:00)

Baku, Azerbaijan, July 25

By Aygun Badalova - Trend:

Polish regulator issued a formal statement of objections to the deal regarding the construction of the Nord-Steram-2 gas pipeline, International Oil Daily (IOD) reported July 25.

The Nord Stream 2 project includes construction of two lines of the offshore gas pipeline with a total capacity of 55 billion cubic meters of gas a year from Russia to Germany under the Baltic Sea, in addition to the existing two lines.

The project is to be implemented by the engineering company New European Pipeline AG. The stakes of partners in Nord Stream 2 AG will be distributed as follows: Gazprom will hold 50 percent, while BASF, E.ON, Engie, OMV and Shell will own 10 percent each.

Earlier the companies jointly applied to the Polish regulator for the approval of their joint participation in Nord Stream 2 AG company.

According to the statement of the Polish Office of Competition and Consumer Protection (UOKiK), the deal might lead to restriction of competition.

"At the moment Gazprom has a dominant position with respect to transmission of gas to Poland, and the planned transaction could further strengthen the company's negotiating position with regard to users in Poland," the regulator said.

The deal is needed for the European partners to officially become shareholders of the project company, Nord Stream 2 AG, which has actually been established in Switzerland, IOD reported.

Gazprom now remains its sole shareholder, but will reduce its stake to 50 percent if and when other partners finalize the purchase of their 10 percent stakes.

TASS reported that Gazprom, Engie, OMV, Shell, Uniper and Wintershall are currently preparing a joint response to the objections of the Polish regulator.