- The European Union has proposed to extend its natural gas regulations to offshore pipelines, as German support cools for the Russian-backed Nord Stream 2 gas pipeline.
- Support has been slipping since the Social Democrats, previously a partner in Chancellor Merkel's coalition government, went into opposition after the party's defeat in the September Bundestag elections.
- The project's latest blow came this week when the European Commission unveiled the amendment to the EU's energy rules after a months-long struggle to intervene in the controversial Nord Stream 2 project.
- New regulations mean pipeline operator Gazprom (OTCPK:OGZPY) may have to offer some of its capacity to third parties and observe EU laws on “ownership unbundling," which say that a gas pipeline cannot be owned directly by the gas supplier.
- The advantage of Nord Stream 2 for Russia and Gazprom is the ability to avoid using a pipeline through Ukraine, one of the main conduits for gas into Europe, and thus save on transit fees.
- The project has sparked controversy, as eastern European countries such as Poland say it would further increase Europe’s reliance on Russian gas and bolster alternatives to eastern routes; Russia's gas market share in the EU was 42% last year.
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