Gazprom defiant on fine for its pipeline

Russian gas giant Gazprom has vowed to appeal against a fine imposed by Polish authorities in relation to the Nord Stream 2 pipeline project, though the Poles’ action is likely to be welcomed by the United States.

The Polish Office of Competition and Consumer Protection, or UOKiK, earlier on Monday said it had fined Gazprom 213 million zloty ($57 million) for its lack of cooperation with an investigation.

The Polish anti-monopoly watchdog said the reason for the fine stemmed from the refusal of Gazprom to furnish information about contracts made by Nord Stream 2 AG with European companies funding the construction of the Nord Stream 2 gas pipeline.

The pipeline is one of the most important projects for Russia in recent years, and it will double Gazprom’s capacity to ferry gas directly from Russia to Germany. By doing away with the need for a routing through central Europe, Poland and several other states in the region fear the pipeline could undermine their energy security.

“At the beginning of the year, we requested Gazprom provide us with contracts concluded by its subsidiary with other companies financing the construction of Nord Stream 2,” UOKiK President Tomasz Chrostny said on Monday.”The company failed to provide such information.”

Gazprom, a Russian state-controlled company, responded by saying it will take measures to defend its interests, including an appeal against the watchdog’s decision in court, where the UOKiK would need to justify its position. Gazprom said it will not pay the fine because the information request was invalid. The company said it had asked the UOKiK provide a legal justification for the request, but was none was received.

The Polish regulator has been examining the project for years. In 2018, it launched a probe under competition rules against Gazprom and the five Western companies that are co-financing the project on suspicion that they were going ahead without Warsaw’s approval.

According to the Financial Times, under European Union rules, companies involved in a transaction that has an impact on a particular market are obliged to report the transaction to the national antitrust authority and respond to its requests.

The Nord Stream 2 pipeline has become a lightning rod of contention in US-Russian relations, with the White House concerned it would dangerously expand the region’s energy dependence on Moscow, Reuters reported.

Reuters cited government filings and quoted US officials on the extent to which US lawmakers trying to stop the pipeline project.