UPDATE 1-EU delays decision on Russian access to Opal gas pipeline

Wed Jul 16, 2014 11:14am EDT

Related Topics

* Commission cites technical reasons, gives no date

* Russian ministry says decision delayed to mid-September

* Latest in a series of delays (Adds Russian Energy Ministry statement)

By Barbara Lewis

BRUSSELS, July 16 (Reuters) - The European Commission said it had delayed indefinitely a decision on whether to allow Russia greater access to the Opal gas pipeline in northeastern Germany, a move that Russia said could undermine the security of energy supplies to Europe.

Russian gas giant Gazprom has limited access to the pipeline because of an EU law that seeks to prevent energy suppliers from dominating infrastructure.

But no-one else has taken up the spare capacity on Opal, which provides a link between Russia's Nord Stream pipeline in northeastern Germany to the Czech Republic.

Citing technical reasons, Commission spokeswoman Sabine Berger said on Wednesday that the Commission had agreed with German regulator (BNetzA) to prolong the deadline for a decision on Opal.

"It is difficult to specify the exact timing of the decision," she added in an emailed statement.

The Russian Energy Ministry said, however, that the decision on Opal had been extended till mid-September, adding that it was "astonished" by the delay and that it would have a negative impact on Europe.

"Constraints and barriers on the part of the EU authorities, which hinder the usage of already built pipelines with Russian participation or the construction of new ones, hit not only investors in European and particularly German energy infrastructure ... but also create serious risks for European consumers," the ministry said in a statement.

Introduced in 2011, Nord Stream pumps gas from Russia via the Baltic Sea into Germany, bypassing transit state Ukraine. Its capacity is 55 billion cubic metres a year, but Gazprom, which heads the consortium of shareholders, has been pumping only half that.

Opal has a capacity of 36 bcm but also has been operating at half that for the past three years.

Russian President Vladimir Putin said in January the Commission had agreed to allow Russia 100 percent access to Opal, but the Commission subsequently said a decision had been delayed, again citing the need for technical clarifications.

NORTH AND SOUTH

Gazprom, which has been pressuring the European Commission to lift the restrictions, is also at odds with the EU authorities over its even bigger pipeline project, South Stream.

South Stream would carry gas from Russia across the Black Sea to Bulgaria and other EU states. Like Nord Stream, it bypasses Ukraine.

The Commission says South Stream breaks various pieces of EU law, including rules on third-party access and intergovernmental agreements.

Following Russia's annexation of Ukraine's Crimea region, the Commission suspended talks aimed at bringing South Stream into line with EU legislation.

Dominique Ristori, head of the Commission's energy department, said this week the suspension remained firmly in place.

"In the present context our position is very clear. South Stream has no place when we are still in such difficulties with Russia," he told a Brussels meeting on Tuesday.

Talks could resume only on the basis of "clear principles and in particular one principle is crystal clear: the full implementation of EU legislation", he said.

Russia is locked in conflict with the European Union and Ukraine over Ukraine's decision to sign a partnership agreement with the European Union and over Moscow's annexation of Crimea.

The dispute has been aggravated by a row between Ukraine and Russia over how much Ukraine pays for its gas, which has led Russia to cut off gas supplies.

Because Ukraine is a transit state for around half of the gas the EU receives from Russia, there is a risk of knock-on effects for EU nations if the cut-off is prolonged.

The European Commission has brokered talks between Kiev and Moscow, but the last round collapsed without a deal. EU diplomats said this week they did not expect new tripartite talks before the end of August. (additional reporting by Vera Eckert in Frankfurt and Katya Golubkova, Denis Pinchuk in Moscow; editing by Jane Baird)

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