Polish PGNiG takes legal action over EU's Opal pipeline decision

12/5/2016

WARSAW (Reuters) -- Polish state-run gas company PGNiG has sued the European Commission over its decision to grant Russia's Gazprom more capacity on the Opal pipeline through Germany, PGNiG said on Monday.

In October, the European Commission lifted a cap on Gazprom's use of the Opal pipeline, which carries gas from the Nord Stream pipeline under the Baltic Sea to customers in Germany and the Czech Republic.

However, that decision opens the way for Russian plans to expand Nord Stream's capacity and bypass both Ukraine and Poland as a gas transit route.

Poland, which imports most of the gas it consumes from Russia, has criticized the Commission's move saying it threatened gas supplies to central and eastern Europe and PGNiG said it would sue the Commission.

"On Dec. 4 ... our German subsidiary has filed a suit at the European Court of Justice," PGNiG Chief Executive Piotr Wozniak told reporters on Monday. "We want this decision of the European Commission cancelled."

The Opal link decision as well as Gazprom's plan to build Nord Stream 2, embody the worst fears of the Polish conservative government which sees pacts between its powerful neighbors, Germany and Russia, as an existential threat.

Wozniak said the Commission's decision hurt PGNiG's interests and violated EU gas market competition rules, including those intended to prevent energy suppliers from dominating the use of infrastructure such as pipelines.

He said PGNiG had asked the Court to suspend the Commission's decision by Dec. 23 to lift the cap, or a week before Gazprom's increased access to Opal comes into force.

He also criticized the EU executive for not having published the details of its decision yet.

STRICT RULES

A spokeswoman for the Commission said it had taken note of PGNiG's complaint and would publish the text of the decision after receiving consent from German regulators and the companies involved, given it includes commercially sensitive information.

"The Commission's decision was taken on the basis of strict rules, procedures and deadlines, within applicable regulations and market considerations," the spokeswoman said in an email.

If the Court decides not to question the Commission's decision, Wozniak said PGNiG would appeal, threatening a protracted court battle over the decision.

On Friday, Ukraine's president said Warsaw and Kiev plan to act jointly to block projects they see as handing Russia's Gazprom greater market share while depriving Ukraine of transit fees.

Asked whether Poland was seeking more allies in its fight against Gazprom's expansion, Wozniak said a strong case was stronger than many parties.

Poland wants to reduce its reliance on Russian gas supplies to gain "energy independence" and prevent disruptions.

Poland said this year it would not extend its long-term gas supply deal with Gazprom after it expires in 2022 and has revived plans to build a pipeline to bring gas from Norway.

"All this is quite a dark story of our cooperation with Gazprom," Wozniak said. "This huge stream of gas worsens our negotiating position in the context of the Norwegian link.

He said details of a feasibility study for the Norway link should be concluded by the end of the month.

Reporting by Agnieszka Barteczko; additional reporting by Alissa de Carbonnel in Brussels; editing by David Clarke