Nord Stream 2 sues the EU over new gas rules

The Nord Stream 2 gas pipeline company Thursday sued the European Union over new regulations it says endanger the billions of euros invested in the project.

The decision comes after the two sides failed to reach an agreement in recent months.

The company in April launched a “notice of dispute to the EU” under the Energy Charter Treaty, an international agreement that sets rules for cross-border cooperation in the energy industry, including investment protection. The Gazprom-led Nord Stream 2 company is headquartered in Switzerland. Both Switzerland and the EU are signatories of the treaty.

“Nord Stream 2 AG has now decided to ask the arbitral tribunal to determine that the European Union is in breach of its international law commitments under the [treaty] and to make orders requiring the EU to discontinue its breach,” Sebastian Sass, Nord Stream 2’s EU representative, said Thursday.

The notice of arbitration was served Thursday.

The EU’s Gas Directive was revamped earlier this year and extends the bloc’s gas liberalization rules to cover new offshore gas pipelines from non-EU countries. It’s an effort to bring the contentious Russia-backed project — opposed by the Commission and many Central European countries but supported by Germany — under the EU’s regulatory umbrella.

Nord Stream 2 argues the new rules discriminate against the project. The Commission says they do not.

The pipeline is to run 1,200 kilometers from Russia to Germany, but the new rules would only apply to the section of Nord Stream 2 in German territorial waters, a stretch of 54 kilometers.

The company also separately challenged the new rules before the EU Court of Justice.