Ukraine’s GTSOU calls for Nord Stream 1 gas flows to be suspended

Ukrainian gas grid operator GTSOU has called on the German energy regulator to fully suspend the use of Nord Stream 1 and revoke a derogation from EU law, arguing that Russia’s Gazprom’s behaviour over the last two years has been in breach of key European principles.

The letter, sent to BNetzA on Friday and seen by ICIS, comes as incumbent Naftogaz urged the European Commission to reassess the derogation granted to Nord Stream 1 in 2020, which exempts its operator from unbundling rules and from granting third-party access to the 55 billion cubic meter/year pipeline.

GTSOU, which is the driver of the initiative, argued that there is a strong case for BNetzA to suspend flows via Nord Stream 1, allow the transit to be rerouted via Ukraine and revoke the derogation which, it says, is no longer legally justified.

Gazprom, Nord Stream AG and BNetzA did not comment by publication time.

REROUTING OF FLOWS

Firstly, GTSOU noted that the rerouting in full or at least in significant part was possible because most of the gas transported via Nord Stream 1 is shipped further via the OPAL pipeline to central and eastern Europe, which can be equally supplied via Ukraine. The country has a total exit capacity towards the region of 387mcm/day.

Secondly, it insisted that the Ukrainian gas transmission infrastructure was highly versatile and a significant contributor to Europe’s security of supply since access to transmission infrastructure also allowed access to storage capacity – the largest in Europe.

Thirdly, the letter noted, gas transported via Nord Stream 1 required the use of related lines such as OPAL, NEL and EUGAL where various off-takers hold long-term capacity. This capacity could be freed up for gas imported as LNG at planned terminals along the German coast. By rerouting the gas via Ukraine, the German internal pipelines would be available for the transmission of regasified LNG.

The letter also insisted that Gazprom’s “so-called export monopoly was less comprehensive than Gazprom would have us believe”, which means that other producers including those in Russia and Central Asia should be allowed to export gas to European markets.

The letter explains that under Russian legislation the definition of “export” means that Gazprom only has the exclusive right to physically remove the gas from Russia, while being legally obliged to provide other Russian producers with non-discriminatory access to cross-border transmission capacity.

REMOVE THE DEROGATION

GTSOU insisted the suspension of flows via Nord Stream 1 should be correlated with the revocation of the Nord Stream 1 derogation from EU rules, which was granted on security of supply grounds.

One of the reasons states that while the derogation was granted to Nord Stream 1 on the assumption that it would not replace gas transit through alternative routes such as Poland, Gazprom has recently sanctioned and stopped flows via the Polish Yamal pipeline, while maximising flows via Nord Stream 1.

Specifically to Ukraine, the letter noted that Russia’s Gazprom used natural gas to achieve political objectives, with the ultimate goal of harming Ukraine.

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