Polish Agency Probes Nord Stream 2, Backers

Poland's anti-trust agency UOKiK is fining Gazprom and its financiers for their work on Nord Stream 2, it said November 8. It had already blocked the formation of a joint venture between the six companies, which would have been majority-owned by the Russian export monopoly. The five western firms backed away without a challenge, instead paying each its share of the cost to Gazprom directly.

Nevertheless, the agency believes it has the right to fine companies for considering the action and it has launched a "precedent-setting investigation". It has brought charges against six companies suspected of finalising the transaction without approval from the Polish antitrust office. These are: Gazprom, Engie from Switzerland, and four registered in the Netherlands: Uniper, OMV, Shell and Wintershall, it said.

It said the consortium members may have tried to circumvent the regulations by establishing a company to finance the construction of the gas pipeline without the consent of the antitrust authority. Both the withdrawn notification of the creation of the joint venture and the conclusion of subsequent contracts had the same purpose: to finance the construction of Nord Stream 2. 

It said it asked Engie for documents and data regarding contracts concluded with Gazprom, in particular those concerning gas transmission, distribution, sales, supply and storage. But Engie failed to comply, which caused a significant delay. The offence carries a fine of up to €50 ($55)mn, and the agency has decided to demand €40mn from the Swiss subsidiary of the French company. It said other companies had also put difficulties in the agency's path.

UOKiK president Marek Niechciuk said: "We are conducting a very important antitrust proceeding in the Nord Stream 2 case, the effects of which may have an international character. When setting the amount of the fine on Engie Energy, we took into account the importance of this information for the proceedings, as well as the intentionality of this company. Today's decision with punishment is just one of the stages of this project."

The office is also analysing documents collected from other entities. Despite various difficulties, UOKiK has already collected extensive evidence, including, among others, NS2 financing contracts, it said.

"For concentration without obtaining the consent of the president of UOKiK, there is a penalty of up to 10% of annual turnover. In addition, if it was carried out and the restoration of competition on the market is not possible, the president of the office may order, e.g. the sale of all or part of the entrepreneur's assets, shares, shares ensuring control over the entrepreneur, as well as the dissolution of the company over which the undertakings exercise joint control."

The Polish gas market is not considered competitive, however, by European standards, and Nord Stream 2 is not complete. However, Gazprom has had approval from the Danish authorities to lay the section that crosses its waters, absent any challenge to the long-awaited decision in the next few weeks.

Eni did not comment at the time of press.