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Gazprom cuts flows via Opal gas pipeline after Polish challenge upheld
February 1, 2017 / 10:13 AM / 9 months ago

Gazprom cuts flows via Opal gas pipeline after Polish challenge upheld

(Reuters) - Russian gas deliveries to Germany via the Opal pipeline fell by around 30 percent on Wednesday after Poland successfully blocked a deal giving Gazprom a bigger share of the pipeline’s capacity.

A general view shows the headquarters of Gazprom in Moscow, Russia, June 30, 2016. REUTERS/Maxim Shemetov/File Photo

Gazprom sends gas through the Nord Stream pipeline which runs along the Baltic seabed and links up with Opal in Germany but the Russian gas exporter faces curbs imposed by the European Union on how much of Opal it can use.

Last year the EU approved a deal between Germany’s energy regulator and Gazprom giving the producer access to more than its 50 percent share of Opal’s capacity through a mechanism of monthly auctions that lifted exports. The approval was expected to pave the way for Russia to expand Nord Stream’s capacity and to bypass Ukraine as a gas transit route.

Some 80 percent of Nord Stream’s 55 billion cubic meters/year capacity was used in 2016, data shows.

But the European Court of Justice in December suspended the EU approval to give Gazprom as Opal’s co-owner more of the pipeline’s capacity, which had been granted in November, after an appeal from Poland.

“In Poland’s opinion this regulatory exclusion (which was granted to Gazprom) undermines the security of gas supplies and hits the competition on the EU gas markets,” Poland’s energy ministry told Reuters in an e-mailed statement.

Poland imports most of its gas from Russia and is a key transit state for Gazprom’s Yamal-Europe pipeline. It opposes Gazprom’s plan to double the size of the Nord Stream pipeline into Germany, which threatens Poland’s importance as a transit site and potentially undercuts its influence in future gas supply talks.

“Gas transportation via the Opal gas pipeline was reduced in relation to the annulment of February gas auctions in accordance with a European court decision,” Gazprom spokesman Sergei Kupriyanov said.

Flows through Gazprom’s other routes to Europe were unaffected, he said.

An Opal spokeswoman confirmed the reductions were linked to Poland’s legal challenge.

Supplies through the Opal pipeline reach customers in Germany and the Czech Republic. The Court’s decision means that for now, Gazprom will not be able to exercise the right to increase its capacity on the pipeline.

Data on Wednesday showed that gas flows through the Opal pipeline fell by 27 million cubic meters/day (mcm/day) to 64 mcm/day.

Poland’s state-run gas firm PGNiG, which successfully appealed against the EU decision, declined to comment.

Short-term gas prices in Britain and the Netherlands rose due to falling Russian deliveries, cold weather forecasts and already tight supplies, traders said.

Reporting by Oleg Vukmanovic in Milan, Vera Eckert in Frankfurt, Agnieszka Barteczko in Warsaw and Alissa De Carbonnel in Brussels; Editing by Louise Heavens, Greg Mahlich

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