The OPAL Exemption Decision: a comment on the CJEU’s ruling to reject suspension

In June 2009 the European Commission (EC) adopted an exemption decision which prevented Gazprom from being able to utilise more than 50 per cent of capacity in the OPAL pipeline (one of Nord Stream 1 onshore extensions). This led to a situation when OPAL capacity remained underutilised due to a lack of demand from third parties. In October 2016 the EC revised its decision and allowed Gazprom to bid for the remaining 50 per cent of OPAL capacity alongside third parties at PRISMA auctions. First auctions were held in December 2016 but were halted later in the month, following the decision by the Court of Justice of the EU (CJEU) to grant a provisional suspension of the revised exemption decision due to complaints filed by Poland and its 100 per cent state-owned gas company, PGNiG, which called for the decision to be annulled. However, in July 2017 the President of the General Court of the CJEU issued an Order, which rejected the suspension. This means that the revised exemption decision will continue to apply at least until 2019 when the CJEU is expected to make its final judgement on annulment. The auctions restarted in August 2017, leading to a sharp increase in Gazprom’s utilisation of OPAL capacity.

This Insight analyses the Order, focusing in particular on the CJEU’s rationale for rejecting the suspension and its implications for final judgement. The Insight argues that the CJEU is likely to consider the following factors when making its final judgement in 2019: contractual arrangements that might replace the existing contracts under which Gazprom’s gas is supplied to, and transited across, Poland; the impact of Gazprom’s commitments made in the course of DG COMP investigation into its sales in central and eastern Europe, and the progress reached on the construction of Nord Stream 2 pipelines. The Insight concludes that the CJEU is unlikely to annul the revised exemption decision.

By: Katja Yafimava

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