Russia May Let Rosneft Ship Gas Through Nord Stream 2 To Avoid EU Restrictions

The Russian government is considering allowing state-owned oil producer Rosneft to ship gas to Europe via the Nord Stream 2 pipeline, a move that could preempt the imposition of volume restrictions by the European Union.

State-owned energy giant Gazprom, the country's largest producer of natural gas, owns Nord Stream 2 and has a monopoly on Russian gas exports.

Gazprom is expected to complete construction of Nord Stream 2 , which runs from Russia to Germany on the Baltic Sea floor, later this year. The pipeline will have the capacity to deliver 55 billion cubic meters (bcm) of gas a year.

However, EU energy regulations forbid a company that owns a pipeline from filling more than 50 percent of its capacity with its own gas. A German court on August 25 ruled that Nord Stream 2 is not exempt from EU rules.

That would force Gazprom to fill 27.5 bcm with gas from other Russian producers.

Russian Energy Minister Aleksandr Novak told Interfax on September 2 that the government had received a request from Rosneft to export gas through the pipeline. He said a decision will be made at a later date.

Rosneft CEO Igor Sechin had earlier sent a letter to President Vladimir Putin requesting the right to export 10 bcm of gas through Nord Stream 2.

Ukraine has been seeking to stop the almost-complete pipeline and, having failed to convince the United States to impose more sanctions, has called on Europe to observe its own laws and restrict Gazprom from filling up the pipeline with its own gas.

Kyiv stands to lose as much as $2 billion a year in fees should the Kremlin reroute all Russian natural gas bound for Europe that currently transits Ukraine through the new pipeline.

With reporting by Interfax and Kommersant