France joins U.S. in questioning gas pipeline backed by Merkel

By Francois de Beaupuy and Jonathan Stearns on 2/8/2019

PARIS and BRUSSELS (Bloomberg) -- In a last-minute announcement, France agreed to back a European Union proposal creating hurdles for a controversial natural-gas pipeline, rejecting an appeal by German Chancellor Angela Merkel’s government. 

France intends to support an EU proposal on Friday that would give the bloc more say in the Nord Stream 2 pipeline being built between Russia and Germany, despite German objections, a Foreign Affairs Ministry spokesman said. Currently, the project is only subject to international regulations because it is being built between the EU and a country outside the bloc. 

“Work is continuing with our partners, especially Germany, on the amendments that could be made to this text,” the French Foreign Affairs Ministry said. 

While it’s unclear whether France’s stance will sway enough EU countries to adopt the new rule, it will further fuel the controversy over the project. The 750-mi undersea pipeline -- being constructed by Russia’s Gazprom to bolster German supplies as Norwegian, Dutch and domestic sources dry up -- has been pilloried by some of its neighbors and the U.S. administration.

France’s decision aligns it more closely with critics of the project, which say it bolsters Europe’s reliance on Russian energy and bypasses key partners such as Ukraine. President Trump has blasted the project as holding Germany “captive” to Russia and has suggested Europeans buy more U.S. gas. While Gazprom owns the project, half of its $10.8 billion cost is being financed by Royal Dutch Shell, Germany’s Uniper and Wintershall, as well as France’s Engie and Austria’s OMV.

Merkel Support

The German government didn’t immediately respond to a request for comment on the French decision. Merkel earlier on Thursday reiterated her support for the pipeline.

“If we want to diversify, Germany will build new terminals for liquefied gas, which means we don’t under any circumstances want to be dependent on Russia alone,” Merkel told reporters in Bratislava, Slovakia. “But even during the Cold War, Russia was a source of gas and will remain so, without having to give up our energy independence.”

EU governments are due on Friday to decide whether to advance the draft European energy legislation. Officials in Brussels have said the outcome of the meeting is open, with a weighted majority of EU countries needed to advance the initiative. France’s stance deprives Germany, which is seeking to veto the initiative, of needed support.

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