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    Europe Needs Nord Stream 2: Shell

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Summary

Europe’s gas production is declining and its import needs rising, so Nord Stream 2 is in its best interests, Ben van Beurden said June 7.

by: William Powell

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Natural Gas & LNG News, Security of Supply, Energy Union, Corporate, Competition, Investments, Political, Regulation, Infrastructure, , Nord Stream Pipeline, Nord Stream 2, OPAL, News By Country, Netherlands, Russia, United Kingdom

Europe Needs Nord Stream 2: Shell

Europe’s gas production is declining and its import needs rising, so Nord Stream 2 is in its best interests, Shell CEO Ben van Beurden said June 7: “We believe Nord Stream 2 is a good project, it provides infrastructure for importing gas to the EU, which will need. Russia is a major gas supplier to the EU.”

But Shell’s role, as Gazprom’s strategic partner, was simply to act as collector of tariffs, although as a shareholder in gas marketer GasTerra and in Dutch gas producer NAM, Shell is facing a deep cut in its Dutch supplies. 

Gazprom at the moment owns all the Nord Stream 2 capacity, which is a problem for the European Commission (EC), which is trying to liberalise gas markets. The Opal gasline which runs south from the landfall of Nord Stream 1, remains underused owing to regulatory constraints that the EC has imposed on the use of onshore capacity. Nord Stream 1 as a result runs at about 80%.

Nord Stream 1, landfall at Greifswald, N Germany (Credit: Nord Stream AG)

Nord Stream 1, landfall at Greifswald, N Germany (Credit: Nord Stream AG)

Van Beurden said that Shell was in dialogue with the host governments in the UK and the Netherlands and with the EC in order to find a solution for Nord Stream 2, but the EC was taking a firm line against Gazprom on competition law. The EC is also listening to the former Soviet Baltic states and central and eastern European countries who do not want Ukraine to lose transit fees. Slovakia is safe as Gazprom has a ship-or-pay agreement which runs for over another decade but Gazprom's deal with Ukraine expires in 2019, the proposed start date for Nord Stream 2.

These states also believe that Nord Stream will weaken security of supply in central and southern Europe. The EC has created an Energy Union policy, under Commissioner Maros Sefcovic, which aims to eliminate projects of this type and to promote diversification away from Russia, through investments in LNG terminals, interconnectors and reverse flow capacity.

 

William Powell