Nord Stream Can’t Restrict Other Suppliers

May 2012, Vol. 239 No. 5

The European Commission has ruled that the Gazprom-led consortium Nord Stream must allow other gas suppliers to share capacities of its pipelines on German territory.

The objects of the decision are the OPAL and NEL gas pipelines in Germany. These connect the Nord Stream offshore pipeline (transporting Gazprom’s gas on the Baltic seabed) with Germany’s interior and farther afield in Europe. In effect, the Commission denied the requests for OPAL and NEL to be exempted from third-party access.

OPAL (Ostsee Pipeline Anbindungs Leitung, or Baltic Connector Pipeline) starts from the maritime Nord Stream’s landfall point, at Lubmin near Greifswald on the Baltic coast. It runs 470 km southward to the German-Czech border, enters for a short distance into Czech territory, and turns westward into Germany again. Owned 80% by the Gazprom-Wintershall joint venture Wingas (as  OPAL’s operator), and 20% by E.ON Ruhrgas, OPAL was completed and connected with the offshore Nord Stream pipeline in 2011, at a cost of €1 billion ($1.3 billion). OPAL has an annual capacity of 35 Bcm, all dedicated to Gazprom’s gas (until the European Commission’s decision).

NEL (Norddeutsche Erdgas Leitung, or North German Natural Gas Pipeline) runs also from Lubmin, westward to Hamburg and toward the border with the Netherlands. NEL runs for 440 km with an annual capacity of 20 Bcm, and is connected with the Rehden gas storage site (Germany’s largest). It is due to be completed and connected with the offshore Nord Steam in 2012-2013, at a cost of another €1 billion. NEL’s owners are Wingas again with 70% (and NEL operator), E.ON Ruhrgas with 10% and Nederlands Gasunie (a late entrant) with 20% of the shares.