Poland Fines Gazprom $7.5Bln Over Nord Stream 2

Long-standing opponent to pipeline issues “unprecedented” fine, alleging project restricts competition and hurts consumers.

Poland’s anti-monopoly service has fined Gazprom more than $7.5 billion over its controversial Nord Stream 2 pipeline.

After a two-year investigation, Polish authorities concluded that the pipeline damages Polish consumers and raised a host of concerns over energy security, market competition and the financial partnership struck between Gazprom and five European energy companies to build and manage the pipeline.

The figure is equal to 10% of Gazprom’s annual revenues, the maximum allowable penalty. Tomasz Chrostny, president of Poland’s Office of Competition and Consumer Protection said the fine was “unprecedented.”

The European companies involved in the project — Engie, Uniper, OMV, Shell and Wintershall — have also been fined a total of $61 million, also equivalent to 10% of their annual turnover.

Speaking in Warsaw on Wednesday, Chrostny said Nord Stream 2 would “harm not only competition … but consumers alike.”

“The launch of Nord Stream 2 will threaten the continuity of natural gas supplies to Poland. An increase in the price of the product is also highly likely, with the said increase being borne by Polish consumers. Completion of this investment project increases the economic dependence on Russian gas — not only in the case of Poland, but also of other European states.”

He added: “It is astounding that Western corporations fail to understand that and participate in an undertaking that not only disturbs competition on the market, but also poses a threat to Europe’s energy security.” The watchdog also ordered the European companies to pull out of the project within 30 days.

Gazprom said Wednesday it will appeal the decision. In a statement, the company said the fine “violates the principles of legality, proportionality and the right to a fair hearing.” It added: “The unprecedented size of the fine indicates a desire to oppose the implementation of Nord Stream 2 by any means.”

The case stemmed from Poland’s assertion that the project required approval from the Polish authorities before going ahead. The Office of Competition and Consumer Protection said the six firms originally filed an application in 2015 regarding the establishment of a joint venture to construct and operate Nord Stream 2. But when it became clear Poland had reservations about the project, the consortium changed its governance model in a bid to circumvent the need for Polish approval.

Nord Stream 2 runs parallel to the existing Nord Stream under the Baltic Sea, through Russia, Finnish, Swedish, Danish and German waters.

The Nord Stream 2 pipeline will connect Russia directly to Germany with two twin pipelines running under the Baltic Sea through the territorial waters of Russia, Finland, Sweden, Denmark and Germany. From Germany, Russian gas can then be piped around Europe using existing infrastructure. 

Poland has been a long-time opponent of the project, which it says hits Europe’s energy security and increases Russian influence over the continent. Poland first brought charges against Gazprom and its European partners two years ago, and has previously levied multi-million dollar fines against Russia’s state-owned gas giant for not cooperating with the investigation.

The pipeline is more than 90% complete but has been beset by delays after the U.S. intensified its bid to halt construction, threatening sanctions against Western vessels laying pipe. Germany has also threatened to pull its support for the initiative following the poisoning of Kremlin critic Alexei Navalny with Novichok.

The decision comes just days after Poland’s Prime Minister Mateusz Morawiecki cited the poisoning of Navalny to urge Germany and other EU partners not to turn a blind eye to human rights when doing business with Moscow.

“It’s also worth considering very deeply whether this isn’t a pivotal moment when we should all say that there’s no point in pursuing a project like Nord Stream 2 with Russia,” Morawiecki told reporters at an EU summit in Brussels on Thursday. 

AFP contributed reporting.

(c) The Moscow Times

4 comments

  • In a statement, the company said the fine “violates the principles of legality, proportionality and the right to a fair hearing.” It added: “The unprecedented size of the fine indicates a desire to oppose the implementation of Nord Stream 2 by any means.”

    The country famous for holding sham trials behind closed doors, are whining about a fair hearing and legality? Give me a break!

    Liked by 2 people

    • Off topic : there an article today in the DT about Nagorno-Karabakh, by Con Coughlin. Con’s articles are always swarming with kremtrolls, but it is the amateur ones I hate. Often they are kippers who bought Farage’s bullshit. Such as this arsehole:
      ‘I’d take Putin over Erdogan any day. I believe Putin was right in Ukraine to protect his people from the ethnic cleansing that was happening, and most certainly right in Syria to prevent it becoming a jihadist hellhole and the ensuing mass expulsion of unbelievers, most likely arriving by now on our shores In dinghies.’

      Liked by 2 people

  • Pingback: Poland Fines Gazprom $7.5Bln Over Nord Stream 2 – PERUNDURAI PRODUCTS

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