15 May 2020 15:29

Nord Stream 2 AG to consider appealing BNetzA decision in court, has one month to do so

MOSCOW. May 15 (Interfax) - Nord Stream 2 AG, the project company for the North Stream 2 gas pipeline, will analyze the official text of the Federal Network Agency (BNetzA) decision on rejection of the pipeline's derogation from the European Union's Third Energy Package and will make a decision on further defending its position; the company has one month to appeal, Nord Stream 2 AG told journalists.

"We are awaiting receipt of an official decision and will then assess it and consider further action to defend our rights, including an appeal against this decision in German courts. It is possible to appeal within one month after the decision is taken," the company said.

"Nord Stream 2 AG has taken note of the information on the website of the Federal Network Agency on rejection of the application for derogation [from the requirements of the updated EU Gas Directive]. The regulator considers that the Nord Stream 2 gas pipeline did not comply with the criterion for 'project completion' by May 23, 2019 in line with article 28b, paragraph 1, point 1 of the German Energy Industry Act. Nord Stream 2 AG does not agree with this decision and asserts that as of the actual date of May 23, 2019 the pipeline had been completed from the point of view of economic functionality. On the basis of the legal framework functioning at the time, the company had made non-recoverable investments amounting to billions of euros long before the European Commission announced its plan to amend the Gas Directive," it said.

"International legal experts have confirmed that narrowing the definition of 'project completion' to a conclusion on physical construction of a gas pipeline violates the protection of legitimate expectations and other fundamental rights in EU legislation. This would also contradict the constitutional guarantees of the German fundamental law," the company said.

"The rejection of Nord Stream 2's application shows the discriminatory action of the amended EU Gas Directive. Nord Stream 2 earlier filed a lawsuit on annulling the adjustment to the Gas Directive in the General Court of the European Union and is conducting arbitration proceedings in the framework of the Energy Charter," it said.

"Nord Stream 2 is a project which has received all necessary permissions and is implemented in line with the appropriate national and international legislation. Operation of the Nord Stream 2 gas pipeline will be conducted in line with the requirements of all applicable laws. The ongoing proceedings [on derogation, the lawsuit in the European General Court, and arbitration proceedings in the framework of the Energy Charter Treaty] aim at clarifying the regulations which will be applicable to operation of the Nord Stream 2 gas pipeline. The necessity for such clarification arose as a result of adoption of the adjustment to the EU Gas Directive, which illegally discriminates against the Nord Stream 2 project, as well as due to the absence of estimation of its effect, which is ordinarily a compulsory procedure prior to adoption of new legislation of the European Commission," the company said.

Nord Stream 2 AG additionally said that "the legislative basis for granting permission for construction is distinct from the EU regulations for operating gas pipelines [the Gas Directive]. Therefore, the processes relating to the Gas Directive have no influence on completion of construction of a gas pipeline."