Tuesday, 23 July, 2019

Germany, France 'in constant contact' on Nord Stream project - Berlin

Media playback is unsupported on your device                  Media caption Gas wars The problem with Nord Stream 2 Media playback is unsupported on your device Media caption Gas wars The problem with Nord Stream 2
Deanna Wagner | 10 February, 2019, 22:01

The revised directive would apply to the Nord Stream 2 project.

Berlin and Paris has settled their dispute regarding the Nord Stream 2 and reached a tradeoff on amendments to the EU Gas Directive, suggesting their new version not blocking the pipeline project, AFP news agency reported on Friday, citing the received German-French draft of the accommodating paper.

That will mean charging market prices for gas, rather than Gazprom making its own agreements, and will likely make running the pipeline more expensive in general, said Gustav Gressel, a senior policy fellow at the European Council on Foreign Relations think-tank in Berlin.

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

France had said it would support European Union oversight of new offshore energy pipelines in a move that could have quashed the undersea pipeline plans between Russian Federation and Germany.

Grenell previously made headlines in Germany when he warned companies involved in Nord Stream 2 that they could face U.S. sanctions if they didn't pull out of the project. Under the compromise agreement, Germany will itself be able to determine the rules under which Nord Stream 2 will operate.

"If we want to diversify, Germany will build new terminals for liquefied gas, which means we don't under any circumstances want to be dependent on Russian Federation alone", Merkel told reporters in Bratislava, Slovakia.

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The pipeline is due to emerge at the German Baltic port of Greifswald, from where gas will be distributed to other European Union countries.

The draft compromise reportedly addressed the concerns, saying: "We consider a (gas rules) directive in this spirit indispensable for a fruitful discussion on the future gas transit through Ukraine".

Kremlin spokesman Dmitry Peskov said in Moscow that Washington was spearheading efforts to undermine fair competition. "Russia has been in wait-and-see mode, but this compromise gives the European Commission major leverage", said one of the sources.

"It will challenge a certain number of project parameters which will have to provide transit guarantees via Ukraine as well as transit through Slovakia", an official said. "This day, I think it's good, and he would not have taken place without the German-French cooperation", she said.

Other European companies involved in the project include the Anglo-Dutch Shell, Austria's OMV and France's Engie.

The gas pipeline will link Russian Federation directly with Germany and will be the second gas pipeline connecting Russian Federation with Europe crossing the Baltics.

Western firms invested in the project have so far each financed 600 million euros ($681.00 million) until year's end in what they say is a sign of faith that it will be continued, sources familiar with the matter said.