Poland and Baltic Countries Giddy With Glee Over Successful Legal Sabotage of OPAL Pipeline!
Saturday morning, Gazprom had restrictions imposed on its pumping through the internal European gas pipeline OPAL, which is a land-based extension of Nord Stream. It happened based on a verdict by a court in Luxemburg resulting from Poland's lawsuit.
The head of our European bureau Mikhail Antonov will tell us whether there's any danger for Russia.
The verdict of the European Court of Justice on the Polish claim that restricts Gazprom's access to the OPAL pipeline, made Warsaw excited: they're just screaming with glee with a backdrop of rusty pipes.
«We got Lithuania's and Latvia's support, the European Court of Justice took our side, and the resolution of the European Commission was canceled. Poland's energetic security has been preserved thanks to this».
OPAL is a land-based continuation of the Nord Stream 1, the gas pipeline that runs from Russia to Germany on the bottom of the Baltic Sea. In the proximity to the city of Greifswald, Nord Stream 1 splits into two trans-European gas pipelines: NEL that goes to the west and that very OPAL that transports Russian gas to Czechia through German territory along the Polish border. It transports 32 billion cubic meters of gas per year (1.3 trillion cubic feet). Joint Russian-German projects in energetics delight the Germans. At the same time, they make Poland and the Baltic states very upset as the gas goes somewhere else instead of their territories.
Before 2016, they managed to live with that because there was a rule in the European Union according to which if you had gas and you wanted to sell in the European market and you had built a pipeline for this purpose, you had to share this pipeline. It meant that those who also wanted to sell gas in Europe had the right to feed it to your pipeline. If nobody else had gas or an opportunity to feed it to your pipeline, you could still only fill it by no more than 50%. It's called energetic solidarity. In October 2016, however, Germany pressured the European Commission so it authorized Gazprom to use OPAL to almost its full capacity. Back then, the Polish got very angry and rushed to court. Because of the rush, they didn't prepare well. The claim was turned down because of procedural discrepancies. But they didn't give up on the attempts, and now, seemingly, they got what they wanted. Once again, Gazprom can only use OPAL at 50% capacity. What's next? Two topics are being discussed: can this decision influence the future of Nord Stream 2 that is near completion? And can it influence the result of consultations related to the Ukrainian gas transit that are scheduled for September 19th? Poland forecasts problems for Russia in both directions. They say Gazprom won't be able to fill Nord Stream 2 to 100% capacity, as the restrictions will also concern its land-based extension in Germany, the EUGAL Pipeline which is now being laid in a parallel line along OPAL.
In this case, however, they seem to forget that Berlin must have a plan B if this happens, as it is apparently interested in the 100% filling of the pipeline. This year, the basic EU documents were amended to include a term saying that, from now on, it's not the European Commission that decides the regime of the pipeline usage but the government of the country through whose territory it runs.
As for Ukraine, some experts believe that the verdict of the European Court of Justice is beneficial for it. Moreover, it's not a coincidence that the verdict appeared immediately before the meeting in Brussels.
Andrey Gurkov, economic observer, Deutsche Welle: «This decision is very and the most beneficial for no one else but Ukraine. Warsaw even pointed it out. Kiev's benefit is in strengthening its position during negotiations about the transit continuation with Moscow and Gazprom».
The European Commission, since Poland has been disputing its 2016 decision, now has two months to make an appeal. Russia hopes that Brussels, despite the ongoing re-structural changes in the team, will find the energy to analyze the situation.
Alexander Novak, Russian Minister of Energy: Let me remind you that this decision was made by the European Commission in cooperation with the German regulator and the Gazprom company. And this decision was legally calibrated and approved by the legal services of the European Commission. That's why we need to also understand the estimation of this decision by the legal services of the European Commission itself.
— Does Russia have this understanding now? Will it respond somehow?
— I think we will be able to give you details after we get the conclusion of the legal review.
Russia's Minister of Energy Alexander Novak confirmed that the court's decision will influence the negotiation positions regarding the Ukrainian transit, but only in respect of re-estimation of stability and reliability of the European legal system. Otherwise, it's unpleasant but it doesn’t entail any drama. First, there are alternative routes to ensure the supply. Recently, at the same time as lowering the load of the OPAL, Gazprom increased the volume of gas fed to NEL. Secondly, the volume to be lost, 12 billion cubic meters of gas per year (423 billion cubic feet), is a neglectable value. What influence could it have when it comes to pumping hundreds of billions or even trillions cubic meters of gas? Nothing! It can't even influence the situation in the Ukrainian gas transportation system. Ukraine also understands it.
Valentin Zemlyansky, expert on Ukraine's energy market: «Now, there is this decision of the European Court of Justice regarding Poland's claim, that limits the usage of OPAL, with the Ukrainian gas transit system taking up a part of the volume, something around 12 billion cubic meters. It's great! But, I'd say, if you're not well-prepared, you shouldn't pull the tiger’s tail. Were you going to make a deal or were you going to make him even angrier?»
At the same time, it's also clear that the Poles don't care much about Ukraine's interests. It's not Ukraine that Poland is trying to protect against the cease of transit of Russian fuel through the Yamal-Europe pipeline. Because it wants to make profits itself on re-selling Russian fuel from both old and new sources.
jungewelt.de: «Poland places its bet on the import of the American liquified gas in volumes that exceed the internal demand for the following sale of energy source materials to the neighboring states. The decision of the European Court of Justice is legal preparatory work that enables them to artificially create a deficit of Russian gas in the European Union, which means a niche market for the American liquified gas will be created in Central Europe.»
Ukraine turns out to be a convenient niche in the background of the anti-Russian wave. On August 31st, in Warsaw, the representatives of energy agencies in Poland and the USA met with Ukrainian Secretary for National Security Danelyuk to force-feed his country pricy fuel from around the globe instead of cheap Russian gas, which can still be negotiated. From the outside, Ukraine seems to be an equal member of this mutually beneficial partnership. With due respect, though, they'll be milking it.
Rick Perry, U.S. Minister of Energy: «We're helping Poland to reduce its dependency on Russian gas, and we want to support Poland's decision to become a European hub of liquified gas. Through Poland, this gas will reach our other ally, Ukraine».
Piotr Naimski, Polish government: «In 2021, we'll satisfy Ukraine's need for gas by supplying 6 billion cubic meters per year (211 billion cubic feet)».
Apart from American gas, the Poles are planning to import fuel from Norway. For this purpose, they are planning to build the Baltic Pipe. Denmark, which keeps postponing its authorization on the laying of Nord Stream 2, approved this project immediately. Poland's Prime Minister Marowetski has already painted the picture of a new system for European energetic security.
Mateusz Morawiecki: «The Baltic Pipeline to Norway will be commissioned in just a few years. The Swinoujscie LNG Terminal is being expanded, while the new terminal in Gdansk, as well as pipelines to Slovakia, Czechia, Germany, and Ukraine, will unsure the unprecedented security compared to recent years».
In this scheme, Poland plays the role of the greatest energetic power in continental Europe. There is a problem here. Because it's Germany that's been playing this role until now. The decision of the European Court of Justice to limit the transit of Russian gas through German territory hurts not only Gazprom's interests but also those of Berlin. It creates grounds for new conflicts between Germany and Poland that more and more frequently liven up the political life of Europe.
The current Polish government takes equal pleasure at playing dirty tricks on Russia or Germany. Whenever they manage to make it in both directions at once, they're over the moon. As long as Warsaw enjoys the USA's apparent protection, it'll keep on doing it without practically any punishment when it comes to Germany.
Mikhail Antonov, Alexander Korostelyov, and Andrey Putra, Vesti, News of the Week.