Russia’s Nord Stream 2 pipeline takes EU to court over new gas rules

A Russian-led project to lay a new gas pipeline to Europe is taking the European Union to court to challenge new rules it says endanger its business model, opening a new front in a fight that has divided EU nations, according to Reuters.

Nord Stream 2 said on Friday that it had asked the Court of Justice of the European Union to annul an EU gas directive amendment enforcing measures including a requirement for pipelines not be owned directly by gas suppliers and for at least 10 percent of capacity be made available to third parties.

The pipeline will be both owned and operated by Russian gas export monopoly Gazprom, though 50% of the funding is provided by Germany’s Uniper and BASF’s Wintershall unit, as well as Anglo-Dutch oil major Shell, Austria’s OMV and France’s Engie.

EU nations passed the rules this year over shared concerns that the pipeline would deprive Ukraine of gas transit fees that are a lifeline for its economy by doubling the amount of gas that could be pumped under the Baltic Sea.

Such worries, along with concerns over the EU’s growing dependence on Russia for energy supplies, have also driven fierce U.S. lobbying against the project.

Eastern European, Nordic and Baltic Sea countries see the 1,225 km (760 mile) pipeline as increasing EU reliance on Moscow, while those in northern Europe, especially Germany, prioritise the economic benefits.

The new rules cast doubt over the operating structure of Nord Stream 2, which argues that it has been unfairly targeted by fast-tracked legislation to stall the project.

“The amendment was clearly designed and adopted for the purpose of disadvantaging and discouraging the Nord Stream 2 pipeline,” it said in a statement, adding that the new rules breached “EU law principles of equal treatment and proportionality”.

What could be a protracted legal battle adds to uncertainty that Nord Stream 2 will be operational by the end of the year as planned.

The project is also still awaiting a permit from Denmark to complete construction.

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