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German regulator admits Ukraine’s Naftogaz & gas transmitter to certification of Nord Stream-2 pipeline

Landfall facilities in Russia in September 2021. © Nord Stream 2 / Nikolai Ryutin
German regulator admits Ukraine’s Naftogaz & gas transmitter to certification of Nord Stream-2 pipeline

The Federal Grid Agency of Germany (BundesNetzAgentur, BNetzA) has admitted Ukraine’s state oil and gas company Naftogaz and Ukraine’s gas transmitter to participate in the certification process of the Nord Stream-2 pipeline.

A statement from Bnetza received by Ukrinform clarifies that the companies now have procedural rights to participate in the administrative process, i.e give comments. However, they do not have veto rights.

Yuriy Vitrenko, Naftogaz CEO, said Monday.

“We welcome BNetzA’s decision and are ready to provide our legal position to the regulator in the near future. It is based on the fact that Nord Stream 2 cannot be certified without ensuring its full compliance with European and international legislation. We hope that BNetzA will take our arguments into account properly,” Naftogaz quotes Vitrenko as saying.

Vitrenko added that Naftogaz’s involvement in the certification of Nord Stream-2 will ensure greater transparency of the process. This step is justified, he says, as Naftogaz is one of the largest participants in the European gas market and a major buyer of gas, so the company has a direct interest in making the market truly competitive.

“The launch of Nord Stream-2 will strengthen Gazprom’s dominance and strike at competition in the markets of Slovakia, Hungary, the Czech Republic, Austria, and other European countries. The regulator must take this into account,” said Yuriy Vitrenko.

The chairman of the board of Naftogaz added that Nord Stream 2 does not meet a number of requirements of European legislation. Its operator is dependent on Gazprom, and other customers do not have access to transport gas through Nord Stream-2 along the entire length of the pipeline (from the starting point in Russia to the final point in Germany), as required by law.

Ukraine’s transmission system operator GTSOU was approved to participate in the certification process, as well. In a separate post, the company stated that BNetzA recognized its special role in the process of Nord Stream 2’s certification, noting that “The GTS operator of Ukraine has a special understanding of the consequences that may have the use of various transit routes from Russia.”

“Our company strongly opposes any project that threatens the national security of our country, seeks to circumvent EU laws, or weakens Europe’s energy security. The Ukrainian people are the ultimate shareholder of GTSOU and it is our duty to protect the interests of the state,” said Sergiy Makogon, Director General of GTSOU.

The construction of Nord Stream 2, a pipeline connecting Russia and Germany, has been finished. However, gas flows can start when the pipeline passes regulatory certification. This process began on 8 September, when BNetzA received the relevant application. The agency has four months until 8 January 2022, to reach a draft decision on the certification of the pipeline.

The companies argue that Nord Stream 2 violates a set of EU’s antitrust rules to increase competition and market transparency known as the Third Energy Package which also applies to foreign gas pipelines.

“If Nord Stream 2 starts working contrary to European rules, it will put an end to competition, reforms, and values in the EU gas market. And will serve as an additional signal to some that gas pipelines can be used to achieve their geopolitical goals,” Naftogaz posted on their Facebook page.

Ukrainian and EU officials have accused Russia of orchestrating a gas crisis in order to pressure the EU into speeding up the necessary permits to launch the operation of the pipeline.

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Earlier, Russian President Vladimir Putin announced his readiness to begin gas supplies to Nord Stream 2 the day after receiving permission from the German regulator.

However, the certification of “Nord Stream-2” may be delayed until May next year.

The Polish oil and gas company PGNiG has already presented its position in the certification process of the Nord Stream 2 operator, in which it stressed the threats to the security of gas supplies to the European Union.

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