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German court to rule on Nord Stream 2 gas link on Aug. 25

FRANKFURT, Aug 19 (Reuters) - A German regional court will decide on Aug. 25 whether European Union rules requiring the separation of energy production from transportation and trade must be applied to the Nord Stream 2 (NS 2) gas pipeline, the court’s website showed on Thursday.

The ruling will not affect completion of the controversial link, in which a Gazprom-backed consortium will bring Siberian gas to Germany under the Baltic Sea, but respond to a challenge by the consortium which says the planned operating rules are discriminatory.

The European gas market is eagerly awaiting the start of Russian flows via the pipeline, expected later this year, as gas prices in the region have reached record highs, in part due to low liquefied natural gas supply and record low storage stocks for the time of year.

The $11 billion project with a transport capacity of 55 billion cubic metres has faced political opposition from Washington as well as from Ukraine and Poland across whose territory Russian gas must currently pass on its way to western Europe.

The case before the Duesseldorf Higher Regional Court focuses on EU rules requiring “unbundled” entities, or separate companies, for the production, transport and distribution of gas once the pipeline reaches German territory. If the court rules against the consortium, it could be forced to hold third-party auctions for capacity.

The rules were amended in 2019, with NS 2 claiming the move was aimed at torpedoing the pipeline at a time when its construction was on hold.

It called for the review by the Duesseldorf court following a decision in May 2020 by the German energy regulator, the Bundesnetzagentur, against granting a waiver of the rules.

The project’s forerunner of identical size, Nord Stream 1, has been exempt from unbundling rules since opening in 2011 as at the time it was viewed as an interconnector rather than a direct supplier.

Reporting by Vera Eckert, editing by Kirsten Donovan

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