Energy Solidarity vs. Gazprom

The final refusal of the EU court to allow Gazprom to use 100% of the capacity of the Opal gas pipeline located in Germany will automatically reduce the load of the main export route to the EU - Nord Stream - by more than 30%. So far, Gazprom is solving this problem by using the infrastructure of the unfinished Nord Stream-2 pipeline and refuses on principle to increase gas flow through Ukraine. But with the launch of the new pipe the company will face capacity shortages. Lawyers add that the court has enshrined the principle of European energy solidarity, which does not bode well for Gazprom in future disputes. "Gazprom lost its chance to prove its right to 100% of the capacity of the Opal pipeline (the branch of Nord Stream) in European courts. It's impossible to appeal against the decision of the EU court which dismissed Germany's appeal on July 15, the country's Energy Ministry said. This is confirmed by the lawyers questioned by Kommersant. On the basis of the principle of energy solidarity of the European countries, the EU court upheld the decision of the first instance of 2019, under which Gazprom may claim only 50% of the volume of Opal (the transit capacity through Germany to the Czech Republic - 25.7 billion cubic meters). The restriction was imposed at the request of Poland, which lost part of the transit of gas due to the launch of the Nord Stream pipeline for 55 billion cubic meters of gas from Russia to Germany. At the same time, only Gazprom itself can physically supply gas to Opal, as well as to Nord Stream. Previously, courts have applied the principle mainly in immigration, asylum and border control disputes. The idea that the solidarity principle could also be applied to energy disputes was suggested in March by Manuel Campos Sanchez-Bordon, general counsel of the EU court. Initially, Germany itself tried to limit Opal. In 2009, the national regulator demanded that the Russian monopoly resell half of the transit volumes, but Gazprom refused, and half of the pipeline's capacity was frozen. Gazprom gained access to another 30 percent of the pipe in 2016, when the European Commission allowed it to participate in supply auctions. But Poland immediately challenged this decision; in 2019, the EU court sided with Warsaw, and the monopoly again lost access to 50% of Opal's capacity. Since then, Gazprom was able to maintain full load of Nord Stream (in 2020, it supplied more than 59 billion cubic meters of gas) by redirecting the volume to the onshore branch of the Eugal Nord Stream 2, which is also under construction (it goes from Germany to the Czech Republic). But when Nord Stream 2 is launched, which could happen as soon as this year, the Opal capacity shortage will become tangible. For Gazprom, the decision to limit access to Opal is "maximally unpleasant", says Maria Belova of Vygon Consulting. Right now, she explains, Nord Stream is loaded to 110% of capacity. But if the volumes which are pumped via Opal and the second onshore NEL branch are cut, the monopoly will be able to load the route only at 70-75%. The expert believes that in this way Gazprom is pushed to increase supplies through Ukraine. Sergey Kapitonov from Skolkovo Energy Center believes that the monopoly will try by all means to avoid this and will rather activate commissioning of the first string of Nord Stream-2. The expert notes that any "economic and logistical moves" of Gazprom to solve the habitual problem with Opal may be complicated if this story acquires a political dimension - today Europe is watching Gazprom's export strategy very attentively against the background of gas shortages in the European market and the price rally. Eugene Zhilin, a partner of the QUORUS GmbH consulting company, draws attention to another important consequence of the court ruling, this time at the legal level. The court gave the principle of energy solidarity a normative meaning, the expert explains, which can be used in further proceedings.