Poland Tries to Block Nord Stream 2 Pipeline

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European companies behind the proposed $11 billion Nord Stream 2 gas pipeline project have withdrawn their requests to form a joint venture following efforts by Poland to block the project.

The Polish competition authority said the Russian-led pipeline, which would run along the existing Nord Stream pipeline and connect Russia to Germany via Poland and the Baltic states, would give foreign firms too much control over the local gas market. Russia's Gazprom (Moscow, Russia) is the lead company behind Nord Stream 2 and is already the leading player in the Polish and Baltic gas markets. Poland's anti-trust authority also claimed the new pipeline would undermine gas pricing from the country's new liquefied natural gas (LNG) terminal in Świnoujście, which is run by a Polish company.

Gazprom controls a 51% stake in the project with partners Uniper--part of E.ON (XETRA:EOAN) (Düsseldorf, Germany)--, Royal Dutch Shell (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria) and BASF/Wintershall (Ludwigshafen, Germany) getting 10% each, and ENGIE (EPA:GSZ) (Paris) holding the remaining 9%. Poland's decision stops the Polish subsidiaries of the partners from applying for a permit to work with Gazprom.

In a statement, the companies said: "Today, ENGIE, Gazprom, OMV, Shell, Uniper, and Wintershall (the applicants) submitted their joint response to the Statement of Objections of the Polish competition authority in the merger control proceedings regarding the planned creation of a joint venture among the applicants. Following that, the applicants have decided to jointly withdraw their merger control notification from the Polish competition authority."

It added: "All the applicants believe that the project is crucial for the European energy system and each of them will therefore individually contemplate alternative ways to contribute to it. The applicants' decision to withdraw the notification will not affect the continuation by Nord Stream 2 AG of the construction of the Nord Stream 2 pipelines as planned, including its scheduling."

Nord Stream 2 will have a combined annual capacity of 55 billion cubic meters of gas, effectively doubling the capacity of the existing Nord Stream strings, which were commissioned in 2011 and 2012. The existing Nord Stream runs from the Vyborg compressor station at Portovaya Bay in Russia along the bottom of the Baltic Sea to Lubmin near Greifswald in Germany. The new strings will mostly follow the existing route. Nord Stream is the longest underwater gas pipeline in the world and the most direct route for Russian gas reaching Europe.

Industrial Info covered the launch of the Nord Stream 2 alliance in September last year. For additional information, see September 10, 2015, article--Gazprom Confirms Nord Stream 2 Gas Pipeline.

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