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German regulatory authority suspends certification procedure for Nord Stream 2

Germany’s Federal Network Agency (BNetzA) has announced the suspension of the certification procedure for Nord Stream 2 gas pipeline operator. The reason for the suspension is that, at the current stage of the procedure, Nord Stream 2 does not meet the criteria for an independent transmission system operator, specifically the condition that the operator must be organised in a legal form under German law.

“The BnetzA decision confirms the effectiveness of the PGNiG Group’s legal efforts,” commented Paweł Majewski, President of the Management Board of Poland’s oil and gas company PGNiG. “The German regulator agreed with our position that Nord Stream 2, as a company under Swiss law, cannot serve as a transmission system operator.”

Indeed, Nord Stream 2, which is based in Zug, Switzerland, had decided not to transform its existing legal form but instead to found a subsidiary under German law solely to govern the German part of the pipeline. The subsidiary must then fulfil the requirements of an independent transmission operator as set out in the German Energy Industry Act.

Earlier in August, PGNiG and its German subsidiary PGNiG Supply & Trading submitted a request to the BNetzA for granting participation in the certification procedure for the Nord Stream 2 pipeline operator, a procedure that will determine if the pipeline owner will gain a privileged position on the European gas market.

“In our opinion, from a legal perspective it is not possible to certify a subsidiary of Nord Stream 2 as an independent pipeline operator,” continued Mr Majewski. “Nor is it possible to establish an operator that applies European Union law solely within the territorial waters of the Federal Republic of Germany. We perceive today’s decision as the first step towards ensuring enforcement of the European Union law in relation to the Nord Stream 2 project. In the subsequent stages of the proceedings, we will aim to ensure that the regulatory authorities take into account the principle of energy solidarity and the requirements of the EU law.”

The certification procedure for the Nord Stream 2 operator will be suspended until the organisational transformation of the applicant is completed. Upon completion and submission of new documentation, the BNetzA will resume examination on whether the criteria set out in the law for certification of a gas pipeline operator have been met.

Yesterday, also the Gas Transmission System Operator of Ukraine (GTSOU) was granted participation in the Nord Stream 2 certification procedure.

“At GTSOU, we continue to resolutely object to any gas pipeline project that threatens our country’s national security, seeks to sidestep EU law, or weakens Europe’s energy architecture,” said Sergiy Makogon, Director General of GTSOU.

Photo: Nord Stream 2

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