Nord Stream 2: Ukraine caucus wants to ensure sanctions

 RFERL writes:

Members of the Congressional Ukraine Caucus are concerned a U.S. bill to expand sanctions on a Russian natural-gas pipeline to Europe could be dropped from the 2021 National Defense Authorization Act (NDAA).

The bill, known as the Protecting Europe’s Energy Security Clarification Act (PEESCA), would widen the scope of sanctions on the Nord Stream 2 pipeline running under the Baltic Sea from Russia to Germany to include any individual or entity providing insurance or welding services for the project.

PEESCA has been included in the NDAA defense spending bill passed by both the House of Representatives and the Senate earlier this year with slight variations. The Senate bill would also sanction any company that provides testing or inspection services for the pipeline. Congress is currently reconciling differences between the Senate and House versions of the NDAA and could be finalized in the coming days.

Members of the Ukraine Caucus have written to congressional leaders to urge them to “include language” in the final version of the NDAA that clarifies the new sanctions, indicating they are concerned PEESCA could be taken out or watered down despite bipartisan support for the bill, according to a letter obtained by RFE/RL.

You can read the rest of the piece via the below link:

https://www.rferl.org/a/30916780.html

Poland: another blow against Nord Stream 2

The polish office for competition and consumer protection (UOKiK) has inflicted financial penalties of more than 6 bn EUR on Gazprom and other companies involved in the pipeline construction; polish government hopes that to end the controversed project, writes german newspaper Süddeutsche Zeitung (SZ):

After the attempted murder of Kremlin critic Alexej Nawalny and a decision by its anti-monopoly authorities, Poland is hoping for an end to the controversial Baltic Sea pipeline Nord Stream 2. A construction freeze is apparently possible, said Poland's Foreign Minister Zbigniew Rau on Polish radio. Norbert Röttgen, Chairman of the Foreign Affairs Committee in the Bundestag, had previously also called for an immediate construction stop.

Poland has long been campaigning for a complete shutdown of Nord Stream 2, the 93 percent completion of which is being financed by Russia's gas monopoly Gazprom, the German companies Wintershall and Uniper, the Austrian OMV, the French Engie and the British-Dutch Shell. After the assassination attempt on Navalny with a neurotoxin by the Novichok group, "a key moment has come when we should all say that it makes no sense to pursue a project like Nord Stream 2 with Russia," said Poland's Prime Minister Mateusz Morawiecki to the EU Summit last week for an end to the Baltic Sea pipeline.

In addition to the political rejection by Warsaw, there are now possible billions in fines for Gazprom and millions in fines for its western partners - and probably years of disputes before Warsaw and European courts. On October 6, Poland's anti-monopoly authority UOKiK imposed a fine of almost 6.48 billion euros on Gazprom for alleged violations of Poland's anti-monopoly laws. Engie is to pay 12.4 million euros, Uniper 6.67 million, Wintershall 6.87 million, Shell 6.74 million and OMV 19.6 million. Gazprom and several partners have already announced lawsuits against the decision - it can take years to reach a decision.

The background to the UOKiK decision is a request from Gazprom and the five western partners in 2015: At that time, the companies asked Poland's anti-monopoly authority for approval of a planned joint venture for Nord Stream 2, in which Gazprom will hold half and the five western companies each hold ten percent should hold. According to UOKiK, Gazprom and its partners have recognized Polish jurisdiction and EU law.

But in 2016 the then UOKiK boss announced concerns about the planned joint venture: Nord Stream 2 would reduce competition on the gas market and increase Europe's dependence on Russian natural gas. As a result, the Russian monopoly and its partners withdrew the application in Warsaw in August 2016 - and in 2017 only signed two contracts for the joint financing of Nord Stream 2. However, according to today's UOKiK boss Tomasz Chróstny, these contracts constitute a de facto joint venture without If it had only been a question of financing, Gazprom could have borrowed the billions required for the construction of Nord Stream 2 (total cost: estimated 9.5 billion euros) from banks or the Russian government. The penalties now imposed, each corresponding to a tenth of the annual turnover, are the maximum possible penalty under Polish law. In addition, the companies should terminate their agreements within 30 days.

Gazprom said the Warsaw decision "violates the principles of legality, proportionality and fair trial" and announced a lawsuit; Shell did the same. The Warsaw Anti-Monopoly Court is initially responsible. Should Gazprom and its partners lose there and in an appeal, they should go to the EU Court of Justice. Kremlin spokesman Dmitrij Peskow said of the Warsaw decision that Russian-Polish relations were "not flourishing" anyway. One could therefore not assume that anything would have a negative effect on them.

EU quarterly energy report: impact of Covid-19 on electricity and gas market still considerable

 The EU released the energy report for the second quarter of 2020. Here are the figures of the Covid-19 impact:

"The widespread lockdown measures across much of Europe earlier this year had an unprecedented impact on the EU energy market, causing gas and electricity consumption to fall by 10% and 11% respectively in the second quarter, according to the Commission’s quarterly reports on gas and electricity markets which have just been published. Comparison with the second quarter of 2019 also shows the deep impact across the whole of the economy – with a 14% fall in GDP. At the same time, lower consumption and rise in solar generation contributed to renewables taking a 43% share of the EU power mix in Q2 2020, a new quarterly record – and highlighting again the exceptional impact of the crisis.  

The electricity market report shows that electricity consumption dropped by 11% in the EU27 compared to Q2 2019. Wholesale power prices decreased by 30-50% and reached levels not seen in more than a decade. Fossil fuels were the main losers from this demand shock and this coincided with a surge in solar generation – to the extent that solar energy accounted for 9% of the EU27 power mix.2

(...)

The gas market report is also dominated by the direct and indirect impact of the covid pandemic. The collapse in demand linked to the suspension of so many economic activities led to a decrease in gas consumption of 10% in the EU in Q2 2020. In some Member States, gas consumption was down by 20-30% in April relative to the same period in 2019.

Demand for natural gas was subdued not only in industry, but in power generation as well, as the abundance of renewables did not favour gas, even amid steeply falling gas prices: wholesale prices fell by 50-60% in year-on-year comparison. By the end of May, the TTF spot gas price fell to record lows (3.5€/MWh), slowly rebounding in June 2020 amid easing of the Covid-19 related lockdown measures.

In the context of low demand for gas in the EU, wholesale gas prices on some hubs fell below their US peers in May, resulting in the cancellation of some LNG shipments. Retail prices for an average industrial customer fell by 11% in Q2 2020 year-on-year and household customers also enjoyed lower prices in the majority of the EU capital cities."

You can read the rest of the piece via the below link:

https://ec.europa.eu/info/news/market-reports-2nd-quarter-highlight-impact-covid-lockdown-electricity-and-gas-markets-2020-oct-12_en