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Germany rejects derogation for the Nord Stream 2 pipeline

Germany’s Federal Network Agency (Bundesnetzagentur), the regulatory office for electricity, gas, telecommunications, post and railway markets, has rejected the application of the operator of the Nord Stream 2 pipeline which had asked for derogation from regulation.

According to the Bundesnetzagentur, in order to ask for a derogation, the gas interconnector should have been completed before 23 May 2019. Since Nord Stream 2 pipeline had not been fully laid by the above-mentioned date, the Bundesnetzagentur has rejected the application. Therefore, when it is put into operation, the Nord Stream 2 pipeline will be subject to German regulatory requirements and European rules on unbundling, network access and cost regulation.

The Bundesnetzagentur understood the term completion in a constructional and technical sense, while the applicant, by contrast, believed it to mean completion in an economically functional sense and therefore referred to the investment decision, which was made well before 23 May 2019.

All European Union Member States had the opportunity to examine Nord Stream 2 AG’s application and to submit a response. Responses to the consultation were taken into account in the decision, as was the joint statement submitted by Polish state-controlled oil and gas company PGNiG and its international trading, marketing and shipping arm PGNiG Supply & Trading, which were summoned to the proceedings upon application in a decision of 18 March 2020.

Neither any of the Member States nor the parties summoned shared the viewpoint of the Nord Stream 2 operator as regards the term completion.

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