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I UNDERSTAND
English Section

Polish antitrust watchdog slaps multibillion fine on Russia’s Gazprom over Nord Stream 2

07.10.2020 13:05
Poland’s antitrust authority says it has imposed a multibillion fine on Russia's gas giant Gazprom and multimillion penalties on five other international companies for going ahead with the construction of the contested Nord Stream 2 pipeline "without the required consent."
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.PAP/EPA/SERGEI ILNITSKY

The controversial 1,200-kilometre pipeline being built under the Baltic Sea is expected to have the capacity to send around 55 billion cubic metres of Russian natural gas a year directly to Germany, while bypassing the Baltic states, Poland and Ukraine.

Poland has vehemently opposed the project, saying it will pose a threat to Europe’s energy security by doubling Russia’s gas export capacity via the Baltic Sea.

Poland’s Office of Competition and Consumer Protection (UOKiK) said on Wednesday it ordered Gazprom to pay over PLN 29 billion (some EUR 6.5 billion, USD 7.6 billion) and imposed a penalty of over PLN 234 million (around EUR 52 million, USD 61 million) on five other companies taking part in the construction of the gas pipeline "as a result of the lack of approval for the Nord Stream 2 transaction."

It added that "pursuant to the decision of the President of UOKiK, the entities concerned are obliged to terminate the agreements for financing Nord Stream 2."

The Polish anti-monopoly authority also said in a statement that the fines were the result of proceedings it launched two years ago against Gazprom and five international companies, Engie Energy, Uniper, OMV, Shell and Wintershall. 

"The unprecedented decision and the imposition of the maximum penalty are the outcome of the proceedings UOKiK has concluded with regard to a company that is responsible for constructing and operating Nord Stream 2 gas pipeline without the required consent of the President of UOKiK," the statement said, as quoted in English on the uokik.gov.pl website.

The head of the Polish anti-monopoly office, Tomasz Chróstny, was quoted as saying that "the activities of the six companies negatively impacted competition on the natural gas market in Poland - a market that is of great importance for the entire economy and for the situation of individual households."

Chróstny also said, as quoted on the website, that the launch of Nord Stream 2 "will threaten the continuity of natural gas supplies to Poland" and increase Europe's dependence on Russian gas.

Earlier this year, the Polish antitrust authority said it had imposed a fine of around EUR 50 million on Gazprom for its lack of cooperation in proceedings involving the Nord Stream 2 pipeline.

In August 2016, the Polish anti-monopoly office opposed a planned consortium between Gazprom and its European partners, saying the Nord Stream 2 project would undermine competition.

In November last year, the Polish competition watchdog said it had ordered Engie Energy, a company involved in the construction of Nord Stream 2, to pay PLN 172 million (EUR 40 million) as part of the proceedings.

Warsaw has strongly criticised Nord Stream 2 amid concerns that the pipeline will make the European Union more dependent on Russian gas.

Polish Prime Minister Mateusz Morawiecki has called Nord Stream 2 “a new hybrid weapon” aimed at the European Union and NATO.

Russia's Gazprom this summer returned around USD 1.5 billion that Poland’s state-run gas company PGNiG overpaid for deliveries, following a ruling by an international arbitration court, according to officials.

(gs/pk)

Source: IAR, PAP, uokik.gov.pl