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Nord Stream 2: Broad Mandate for Gas Talks with Russia Sought by Estonia

Estonia, which took over the presidency of the European Union on 1 July, says that the public discourse around the Nord Stream 2 pipeline project could be prolonged to cover all imports of Russian gas to Europe. Estonia will ask the EU’s member states for a broad mandate to talk about all imports from Russia amidst fears that the project could increase the bloc’s dependence on Gazprom, which already supplies about a third of the EU’s gas needs.

Earlier this month, the European Commission asked EU countries to give it a mandate to start negotiations with Russia on the Nord Stream 2 project. The offshore part of the pipeline does not lie within the EU’s jurisdiction where the single market rules would not apply, which shifts the project into a vague legal territory. Estonia says that the legal issue can be solved if Russian gas imports are put into a wider context for which it, however, needs a mandate from the EU Commission. The major legal issue is about whether EU laws requiring energy production to be separate from pipeline ownership should apply to Russia’s Gazprom in a similar fashion as Norway and other gas exporters, who are governed by EU jurisdiction.

“We trade gas with many countries, including Norway and the energy community countries. And we require them to fully implement the third energy package,” an Estonian source remarked, referring to so-called “unbundling” rules under which energy production and transmission assets need to be owned by different legal entities. Introducing a different jurisdiction and set of rules would be difficult to explain to the wider international community, the source commented. “Nord Stream 2 would run alongside Nord Stream 1. If we agree rules on Nord Stream 2, why shouldn’t they apply to Nord Stream 1? It makes me wonder if we shouldn’t go for a wider mandate to cover all gas from Russia,” the official concluded.

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