EU court again rejects Nord Stream 2's challenge to EU Gas Directive

MOSCOW. Nov 27 (Interfax) - The General Court of the European Union has once again rejected the lawsuit filed by Gazprom's Swiss subsidiary, Nord Stream 2 AG, challenging the EU Gas Directive, a court statement said.

The contested directive came into effect on May 23, 2019. It requires pipeline operators to separate ownership of transportation operations and implement non-discriminatory third-party access to transmission and distribution systems based on publicly announced tariffs.

In 2020, the European Court dismissed Nord Stream 2 AG's initial lawsuit against the directive. In July 2022, the court partially accepted the case and annulled the previous decision, returning it for a decision on the lawsuit's merits.

Explaining its latest ruling, the court said that "Nord Stream 2 AG invested in the pipeline despite having no assurance that EU regulations would not eventually apply to it. The company could foresee that EU institutions and several member states, which had long held corresponding positions, would use their influence to extend internal market rules to third-country pipelines like Nord Stream 2. Given the state of the project in November 2017, when the Commission proposed the amendments, Nord Stream 2 AG could anticipate that it would not qualify for the exemption reserved for pipelines completed before the directive's effective date."

Nord Stream 2 AG could operate the pipeline and generate revenue from its investments without the exemption, it said.

"The EU legislative body did not violate the principles of legal certainty or legitimate expectations by stipulating that only pipelines between an EU member state and a third country completed before May 23, 2019 could benefit from the partial exemption," it said.

The exemption does not breach the principle of equal treatment, the court said. "Pipelines completed before May 23, 2019 and those not completed by that date such as Nord Stream 2, are not in comparable situations," it said.

The Nord Stream 2 underwater pipeline, with capacity to transport 55 billion cubic meters of gas per year, runs from the Slavyanskaya compressor station in the Kingisepp district of Russia's Leningrad region across the Baltic Sea to Germany. The German authorities suspended the process of certifying the pipeline, and the United States imposed sanctions on project company Nord Stream 2 AG. Both lines of the pipeline were filled with gas and prepared for operation by Gazprom. One line was damaged by powerful explosions in September 2022.