Opal Agreement: EU approves increased Gazprom use of Opal pipeline - WSJ

17:02 Oct. 26, 2016

EU approves increased Gazprom use of Opal pipeline - WSJ

A Gazprom logo sits illuminated at night above an OAO Gazprom Neft gas station in Belgrade, Serbia, Jan. 15, 2015 (AP photo)

Russia and the European Union are mending their business relationships despite growing tensions over Moscow's bombing campaign in Syria

The European Commission on Tuesday authorized Russia's PAO Gazprom to ship more gas through a key connector pipeline in Germany, two people familiar with the matter said.

Tuesday's deal on Gazprom's Opal pipeline comes as the commission nears a settlement of its antitrust charges against the company, on which a preliminary agreement could be announced as early as Friday, according to the officials.

It shows that Russia and the EU are taking pragmatic steps to ease some of their business ties, especially on the energy front, where Russia remains the dominant supplier of natural gas for many of the bloc's member states.

Read also Russia's gas pipeline plans threaten European unity - Financial Times

But the agreement also carries risks, because it allows Gazprom to divert even more of its gas transit away from Ukraine, which is locked in a bloody conflict with pro-Russian separatists in its east and whose Crimean peninsula remains occupied by Russian forces. It also sends a conciliatory signal to the government of President Vladimir Putin, just days after EU leaders held off on imposing additional sanctions on Russia over its bombing of Aleppo, Syria.

Opal stretches some 470 kilometers from the German Baltic Sea coast to Brandov on the Czech-German border. It is the one link between Gazprom's Nord Stream pipeline, which ships gas directly from Russia to northern Germany, and Central and Eastern Europe, markets the company can otherwise only reach via Ukraine.

Since its completion in 2011, Gazprom has been able to use just 50% of Opal's 36 billion cubic meter of annual capacity, because of EU rules that force the owners of pipelines to open their transmission networks to competing suppliers. The remaining 50% capacity of Opal have stood empty.

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