Polish “pshaw”: Warsaw may drive Nord Stream-2 to court

As Warsaw says “pshaw” to Nord Stream-2, the case may end at court. This will not happen if the Polish anti-monopoly watchdog UOKiK dares to oppose the political line of Warsaw and recognizes the project useful to the country. So far, its objections to a planned joint venture by Russia’s Gazprom and five big European companies to build the Nord Stream-2 are part of the anti-Russian policy.

According to the watchdog, “Gazprom has a dominant position with respect to transmission of gas to Poland, and the planned transaction could further strengthen the company's negotiating position with regard to users in Poland.” The decision is not final and the companies will be disputing it.

“It is important to understand that the Polish watchdog has not made a final decision yet. It has responded to the petition by the consortium after an 8-month delay,” says Alexey Grivach, the deputy director of the National Energy Security Fund. “It has just expressed its objections saying that the Nord Stream-2 may undermine the local competition in the Polish market. I think Warsaw is just delaying with the final decision.”

The expert believes that for the companies it is important now to receive permission for the Nord Stream-2 from Finland, Sweden, Denmark, and Germany, as the pipeline will run through the territorial waters and economic zones of these countries in the Baltic Sea. Nevertheless, they cannot ignore the decision of Poland either. 

“On the one hand, Nord Stream-2 is favorable to Warsaw, as it will be able to buy more gas from German companies, and, as it says, to refuse from extending the long-term contract with Gazprom. On the other hand, the Nord Stream-2 project has been so much politicized today that any options are possible. As Europeans say, everything will be done step by step,” Grivach says.

Now, Gazprom’s partner companies E.ON, BASF/Wintershall (Germany), Shell (Netherlands-Britain), OMV (Austria) and Engie (France) have two weeks to dispute the watchdog’s objections. According to Kommersant, Gazprom said on behalf of the consortium members it is preparing notes and refrained from more comments. Afterwards, Poland will have to make the final verdict.

“So far the watchdog has given a resolution that meets the political line of the authorities. If it fails to change its final decision, I think the companies will appeal to the court,” Alexey Grivach said. “It is hard to say if they will be disputing the need for the Polish anti-monopoly watchdog’s permission that bears no relation to the project or the objections of the watchdog. So far Poland has been losing the trials connected with the Nord Stream.”

Anyway, the expert says, European companies will hardly refuse from the Nord Stream-2, as the project is highly profitable and ensures the energy security of Europe – something it is experiencing problems with.

Gazprom sends gas to Germany across the Baltic Sea via the Nord Stream twin subsea pipelines. The proposed Nord Stream-2 project would add a second twin pipeline with a capacity of 55 billion cubic meters per year across the Baltic. The preliminary cost of the project is $9.9 billion.

U.S. has already opposed the project. Secretary of State John Kerry said it threatens Europe’s energy security. Later, a group of senators sent a letter to the European Commission saying that Nord Stream-2 is a step back in the diversification of European sources of energy.  German Chancellor Angela Merkel said the project is economic, not political. According to the European Commission's Deputy President of Energy Union Maroš Šefčovič, the continued gas transit via Ukraine is the key prerequisite for pragmatic talks on Nord Stream 2.