NORD STREAM 2 CERTIFICATION ANEW

PLATTS - 16 Nov 2021 - Ukraine's gas grid operator GTSOU expects the certification process for the Nord Stream 2 gas pipeline operator to take "several" months, it said Nov. 16, after it was granted permission to take part in the process by the German regulator.

The Bundesnetzagentur (BNetzA) has until January 2022 to publish a draft decision on whether to certify Gazprom-owned Nord Stream 2 AG -- operator of the 55 Bcm/year pipeline -- as an independent gas transmission system operator.

On Nov. 15, BNetzA said it had granted both GTSOU and gas producer Naftogaz Ukrayiny the right to participate in the process. "Naftogaz and GTSOU have today been admitted to participate in the certification procedure," a BNetzA spokesperson said late Nov. 15.

The operator of the pipeline applied to BNetzA in June this year for certification as a system operator, which it needs ahead of commercial operations.

GTSOU head Sergiy Makogon said the company would continue to oppose the Nord Stream 2 project. "When we learned that Nord Stream 2 AG had applied for certification as an independent gas transmission operator, we could not stand idly by," Makogon said.

"We knew that it was our responsibility to intervene in this process with BNetzA, to state our earnest objections, and to present our legal arguments."

Olga Bielkova, GTSOU's director of corporate affairs, added: "GTSOU has a direct stake in the Nord Stream 2 AG certification process. This is what motivated us to apply in the first place. And it is encouraging that this has now been duly recognized by the Bundesnetzagentur."

"We expect the process to take several months. And what I can promise with confidence is that GTSOU will resolutely defend Ukraine's interests within this legal process," Bielkova said.

Russia has said that Nord Stream 2 is ready to begin commercial operations pending regulatory approval and that gas flows through the pipeline would help ease the current high European gas prices, which remain at sustained highs on winter supply concerns.

According to S&P Global Platts price assessments, the TTF day-ahead contract hit an all-time high on Oct. 5 of Eur116.10/MWh and has remained volatile through the remainder of October and into November.

The TTF day-ahead price was assessed at Eur79.55/MWh on Nov. 15, up 472% from the same assessment a year ago.

EU gas directive

Naftogaz CEO Yuriy Vitrenko said late Nov. 15 that the company was "encouraged" that BNetzA was willing to examine the issue from different angles.

"Naftogaz hopes that our arguments will help BNetzA to make a fair decision on the certification of the Nord Stream 2 operator," he said.

The regulator has already allowed Poland's PGNiG and its German trading subsidiary to take part in the certification process for Nord Stream 2.

Allowing Naftogaz and GTSOU to take part will likely further complicate the certification process for the operator.

Under the amended EU Gas Directive, which came into force in May 2019, new non-EU gas pipelines must comply with regulatory requirements on third-party access, ownership unbundling and tariff transparency.

At present, Gazprom has a monopoly on pipeline gas exports from Russia, meaning there would have to be legislative changes in Moscow to enable third parties to use capacity in the pipeline.

GTSOU has also argued that as an independent transmission operator, Nord Stream 2 AG would remain within the Gazprom Group, "a vertically integrated energy undertaking, contrary to current European law."

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