In blow to Germany, France to back EU rules on Nord Stream 2

PARIS/BERLIN,  (Reuters) - France plans to back an EU proposal to regulate Russia's Nord Stream 2 pipeline, its foreign ministry said, potentially threatening its completion and dealing a blow to Germany which has been trying to garner support for the project.

The European Union executive wants to extend its internal energy market laws to offshore gas pipelines before construction is completed, giving it a say over how the new gas link under the Baltic Sea from Russia to Germany is used.

In its current form, Nord Stream 2, fully owned by Russian state energy firm Gazprom, would not be compliant with tougher new rules foreseen for new infrastructure projects.

Diplomatic sources said earlier that Germany had been pressuring other European capitals to block the new directive.

"France intends to support the adoption of such a directive. Work is continuing with our partners, in particular with Germany, on possible changes to the text," French foreign ministry spokeswoman Agnes von der Muhll said in a briefing.

Any delay in building the pipeline would create uncertainty for Gazprom's partners: Germany's Uniper and BASF's Wintershall unit, Anglo-Dutch Shell, Austria's OMV and France's Engie.

The EU bloc is divided in its support for the project. Eastern European, Nordic and Baltic Sea countries view the 1,225 km (760 mile) pipeline as holding the EU hostage to Moscow, while those in northern Europe, especially Germany, prioritise the economic benefits.

 

DEPENDENT ON RUSSIA?

An EU source said earlier that France's vote would be decisive, likely leaving Germany short of a blocking minority.

Opponents of the pipeline worry it will weaken support for Ukraine by depriving Kiev of gas transit fees along the traditional route for Russian supplies, which fill over a third of the EU's gas needs.

The U.S. ambassadors to Germany, Denmark and the European Union urged EU members to vote against the pipeline.

"Cancelling the project would send a clear signal that Moscow cannot get away unscathed with its aggression against neighbouring states, and its meddling in our democracies," they wrote in a joint op-ed published by Deutsche Welle on Thursday.

Chancellor Angela Merkel said Nord Stream 2 would not make Germany dependent on Russia for gas, stressing that Ukraine must remain a transit country.

"Do we become dependent on Russia due to this second gas pipeline? I say 'no', if we diversify at the same time," Merkel told a news conference in Bratislava.

Uniper, which has so far spent about 600 million euros ($681.00 million) out of the 950 million it earmarked for the project, said its assumption was that Nord Stream 2 would still be realised.

"This is a project for the next decades and therefore, to a certain extent, independent of current events," a spokesman for the group said.

A spokesman for Wintershall said the group would closely watch any further developments.

If the proposed regulation musters enough support, negotiations on final draft rules could begin as early as next week.

 

($1 = 0.8811 euros) (Reporting by Jean-Baptiste Vey in Paris, and Paul Carrel, Andrea Shalal and Markus Wacket in Berlin, Tom Kaeckenhoff in Duesseldorf and Christoph Steitz in Frankfurt Writing by Alissa de Carbonnel and Richard Lough; Editing by Kirsten Donovan)

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