September 13, 2019 / 10:52 AM / a month ago

German regulator orders Opal pipeline to curb gas flows

FRANKFURT (Reuters) - Germany has ordered the Gazprom and Wintershall DEA controlled Opal gas pipeline to stop selling a significant amount of capacity to ship gas from the subsea Nord Stream 1 pipeline to onshore European grids, its network regulator said on Friday.

The move to immediately stop the auctioning of 15.9 million kilowatt hours per hour follows a ruling by Europe’s top court on Tuesday, and means Russia’s state-controlled Gazprom will have to find alternative routes to deliver some supplies.

Total Opal capacity amounts to 40 million kWh/h.

The European Court of Justice overruled a previous European Union decision that allowed the operator of Opal, Opal Gastransport (OGT), and Gazprom to sell and ship more supply, after Poland contested the arrangement.

Poland claims is that its supply security is infringed by Russia diverting huge volumes directly into Germany, away from traditional routes via Ukraine and Poland.

Gazprom is building the Nord Stream 2 pipeline parallel to the first as it tries to bypass Ukraine, still its main gas transit route to Europe despite rows about prices, while Belarus and Poland serve as routes on the Yamal pipeline.

Gazprom supplies around a third of Europe’s gas needs, but exports via Ukraine were partly suspended on several occasions due to disputes over price.

Some European countries including Poland have begun importing liquefied natural gas (LNG) to diversify purchasing away from Russia.

The latest move in Germany relates to 80% of Opal that is owned by WIGA Transport, a joint venture of Gazprom and Wintershall DEA [RWEDE.UL] but not the 20% owned by a Uniper subsidiary.

“The Bundesnetzagentur believes that Gazprom has alternative transport routes and destinations available to meet its delivery obligations in the European Union,” the agency said in a statement, adding this order was on pain of fines.

OGT’s next auction would have been for October, held on Sept. 16.

An OGT spokesman said it would comment on the decision shortly.

A Russia-Ukraine gas transit agreement is due to expire at the end of the year. Representatives of Russia, Ukraine and the European Union are set to meet on Sept. 19 for talks on Russian supplies to Ukraine.

Friday’s ruling did not apply to Eugal, an onshore pipeline running parallel to Opal.

Reporting by Vera Eckert, editing by Riham Alkousaa and Louise Heavens

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