The EU lifted a cap on Gazprom's use of the Opal Pipeline in Germany, which takes gas from its Nord Stream Baltic Sea pipeline to end-users in Germany and the Czech Republic, opening the way for Russia to expand Nord Stream's capacity and bypass Ukraine as a gas transit route.
Together with a separate move to settle an antitrust case against Gazprom, the resolution of key disputes with Moscow angered some EU nations who want a tougher stance taken toward Russia over its military actions in Ukraine and Syria.
"It's very good for Gazprom, it's very good for Europe and it's very bad for Ukraine," Thierry Bros, a senior researcher at Oxford Institute of Energy Studies, said of the Opal decision.
Russia's state gas exporter, which supplies about one-third of the EU's gas, retains its access to 50% of the pipeline under the new rules.
But it gains the right to bid for another 7.7 billion cubic meters (Bcm) of gas carrying capacity, or as much as 12.8 Bcm if other suppliers do not take up a provision giving them access, a European Commission official said on Oct. 28.
Reuters reported earlier that rivals will be given access to up to 20% of Opal's 36 Bcm of annual capacity.
Since its completion in 2011, Gazprom has only been allowed to use 50% of the Opal Pipeline under an EU ruling aimed at preventing dominance of the supply infrastructure.
The European Commission said its latest decision, which applies until 2033, would improve competition. "This is not just a decision we've taken for political reasons, that we want to be friends with Gazprom," a commission official said.
The decision modified a proposal made by Germany in May that would have given Gazprom almost full access to the pipeline. A spokesman for the German energy regulator Bundesnetzagentur said it would now hold talks with the affected companies.
According to an EU source, guarantees that Gazprom will keep piping gas across Ukraine after its contract expires in 2019 are being sought. Three-way discussions with government in Kiev concerning winter transits are also desired, the source said.
"We are not trading in a void," an EU source said.
European energy chief Maros Sefcovic said on Oct. 27 that he was "making a maximum effort" to broker a deal between Russia and Ukraine to ensure uninterrupted gas supplies for European and Ukrainian clients this winter.
"So far we haven't been successful," Sefcovic told Reuters, adding he hoped to meet with Russian official soon.
President Vladimir Putin said on Oct. 27 that Russia was ready to resume supplies to Ukraine "any second" if Kiev agreed to pre-pay.
Nord Stream 2
Opening up Opal also removes a key hurdle that had stalled European partners' investment in Gazprom's 9.9 billion-euro plan to double the capacity of Nord Stream Pipeline under the Baltic Sea.
With Russia's gas routes to Europe increasingly politicized since it annexed Ukraine's Crimea region in 2014, many Eastern European countries and the U.S. have opposed the project as threatening to sideline Ukraine as a transit route.
As a result of changes to Opal alone, Ukraine's state energy company said in a statement on Oct. 27 that it could stand to lose as much as US$425 million per year in transit fees.
Before Oct. 28's decision, Poland's state-owned gas company PGNiG threatened to sue the European Commission over the Opal decision, saying it threatened its own security of supplies.
However, the commission said it sees no need for Nord Stream 2, with an official saying Oct. 28's decision further reduces the rationale for a new big pipeline.
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