German lower house passes EU gas directive changes

Germany's lower house of parliament, the Bundestag, has approved a bill that would alter the country's gas law to bring it in line with the EU's amended gas directive.

The bill is a "one-to-one implementation of the European directive", the economy ministry said.

But the bill still requires approval from the upper house of parliament, the Bundesrat, before becoming law. The Bundesrat is scheduled to take up the bill on 29 November. This could allow the amended directive to enter into force this year, the economy ministry said.

Under the changes, the directive will extend rules governing third-party access, unbundling and tariffs to new import pipelines running from non-EU countries. The regulations will apply to the section of the network between the EU member state or its maritime border and the first point of interconnection with the network of that state.

The rules apply to pipelines that were not ready for commercial operation at the date of the legislation's commencement, preventing them from receiving a derogation from EU rules allowed for existing infrastructure. Existing connections with non-EU countries will be eligible to receive exemptions until 24 May 2020.

The amended directive entered into force on 23 May, and member states are obligated to transpose this into national law within nine months — by 23 February.

Russian state-controlled Gazprom's planned 55bn m³/yr Nord Stream 2 gas pipeline — which will deliver Russian gas to the German beach — would likely not be eligible for an exemption under the directive's rules, as the project is still under construction. This could require compliance with EU unbundling and third-party access rules, which may limit Gazprom's access to the pipeline's full capacity once the line is completed.

But Gazprom has argued that the pipeline is already "substantially completed", given that the section in German territorial waters has been laid, and is seeking to overturn the effect of the amended directive under the Energy Charter Treaty. Nord Stream 2's developer in July also filed a separate legal suit with the European Court of Justice that seeks annulment of the amended directive.

Germany, as Nord Stream 2's EU entry point, could draw up an intergovernmental agreement with Russia and decide to exempt Nord Stream 2 from EU gas market law through a consultation procedure. But the European Commission would have to authorise and approve the agreement.

By Jacob Mandel