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EU wants decreased reliance on Russian pipelines for LNG imports

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LNG Industry,

According to Reuters, a draft European Union (EU) document suggests that EU regulators are preparing to import more LNG, whilst criticising Russian aims of expanding its pipeline capacity to Germany. The document represents a European Commission (EC) effort to ensure a single energy market based on regional cooperation.

Reuters reports that a ‘state of the union’ address will be given by the European Commissioner, Maros Sefcovic, later in November 2015. Reuters added that it had seen a draft copy, which states that, in early 2016, the EC will announce a new LNG and gas storage strategy in order to ensure that the EU can fully benefit from diversification. In addition, it will highlight the crucial nature of LNG and gas negotiations with the US on a trade treaty.

Reuters claims that the draft referred to a shareholders’ agreement between five European companies and Gazprom to construct the Nord Stream II pipeline to Germany under the Baltic Sea, thus bypassing the traditional transit nation, Ukraine. The EC claimed that it would assess such an agreement “rigorously against the European regulatory framework,” and that it would have to comply entirely with competition and public procurement laws, as well as environmental regulations. In particular, the EC fears that the expansion of Nord Stream would enable Gazprom to dominate the German market and undermine the widespread interest that Ukraine stays as an important transit nation.

The draft also claims that the project will not be able to acquire any special treatment through its Project of Common Interest system. This system offers the EU money and faster planning for strategic infrastructure.

Reuters added that, in assessing the energy union overall, the report will argue that further progress is required. This is because numerous governments favour domestic needs as opposed to regional solutions, which the EC claims will improve security of supply, as well as reduce the energy costs for consumers.

Edited from various sources by David Rowlands

Source: Reuters

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