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Poland in New Move Against Russian Pipeline

Regulator could punish Gazprom and its partners in the German-backed Nord Stream 2 project.

10 May 2018

Gazprom and five European companies building the Nord Stream 2 pipeline are being warned by Poland’s competition authority about breaching Polish law.

 

Nord Stream 2 will double the amount of Russian gas pumped directly to Germany, a development Poland fears will deepen European dependence on Russian energy.

 

Poland’s competition regulator UOKiK said yesterday that it had initiated proceedings against Russian state-controlled Gazprom and OMV, Shell, Wintershall, Uniper, and Engie, the Financial Times reports.

 

In 2016, UOKiK blocked the five companies from forming a joint venture with Gazprom to finance and build the pipeline.

 

The companies then offered loans to finance the project. The regulator said this “could be an obvious attempt to circumvent the lack of consent to establish a company financing the construction of the gas pipeline.”

 

UOKiK head Marek Niechcial said, Our aim is not to block the project but to make sure the law is being obeyed, but at the same time the project could be delayed,” Bloomberg reports. 

 

The new pipeline parallels the existing Nord Stream pipe across the Baltic to northern Germany. When it goes into operation late in 2019, the two pipelines will supply 30 percent of the EU’s gas, Bloomberg says.

 

The need for Nord Stream 2 will become apparent in coming decades, as European gas production falls, Germany-based Uniper told the FT, saying “We therefore firmly expect that Nord Stream 2 will be realized.”

 

The companies have 21 days to respond to the regulator. It will then decide whether to impose penalties, which could range up to 10 percent of a company’s turnover, according to the FT.

 

 

  • Domestically, Poland relies heavily on coal for heating and electricity, but it could be on the threshold of a radical change. PGE, the largest Polish power group, is promoting a nearly $10 billion offshore wind project. The group may scale back its role in the country’s first nuclear plant as it prioritizes wind, especially if parliament approves wind-friendly legislation, Reuters writes.

 

  • Poland is among the most polluted countries in the EU. Recently the EU court found Poland guilty of violating air quality regulations. An all-out campaign for electric vehicles could help clear the air and bring the country within the EU’s strict pollution guidelines.

Compiled by Melissa Castano

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