OREANDA-NEWS. EU leaders are expected to discuss Russian state-controlled Gazprom's plans to double the capacity of the 55bn m?/yr Nord Stream gas pipeline between Russia and Germany, on 17-18 December.

A number of EU countries — most vociferously Poland and Slovakia — have pressed European Council president Donald Tusk to have the issue formally discussed by EU leaders at their December meeting.

The Baltic states, Czech Republic, Hungary, Poland, Romania and Slovakia have insisted that EU leaders also examine Gazprom's pipeline extension plans. Countries like Greece and Bulgaria later softened their opposition to the pipeline.

Slovakia — which forms part of the old route through Ukraine for Russian gas deliveries to Europe — fears the loss of substantial transit revenues from Nord Stream 2. State-controlled system operator Eustream has about €1.25bn ($1.33bn) of bonds outstanding that are largely backed by its expected revenues under ship-or-pay contract with Gazprom.

The Baltic countries and Poland argue that there will be negative effects on EU energy security. Poland could also lose revenues if Gazprom uses the new pipeline to reduce gas flows through the Yamal-Europe pipeline, which carries gas across the country from Belarus to Germany.

EU leaders do not make formal decisions on specific infrastructure projects like Nord Stream. But the signatories to the letter argue that the pipeline could derail the EU's common foreign and security policy.

All EU leaders, including Germany's chancellor Angela Merkel, would have to approve any call for the European Commission to closely examine the project, including competition and procurement aspects. Germany is unlikely to support any statement by leaders criticising the Russian pipeline project.

In a Russian transcript of his meeting with Russian president Vladimir Putin, German vice chancellor and energy minister Sigmar Gabriel stressed the importance of Germany remaining solely competent for the project's legal assessment, to limit "external meddling". Gabriel, in the transcript, also stressed the need to settle Ukraine's transit role after 2019.

EU climate commissioner Miguel Arias Canete says the commission will "vigorously" assess the project's full compliance with EU internal energy market legislation, environmental and public procurement rules. Canete also hints at competition concerns noting that Nord Stream's expansion would lead to a "dominant" position of Gazprom on the German market, increasing its share from 40pc to over 60pc.

Opponents also call for Nord Stream 2 to comply with EU law not only on member states' onshore territory but also in their territorial and exclusive economic zone waters.

Canete says Nord Stream 2 will never be an EU project of common interest (PCI) as it does not diversify supply sources or routes. EU-favoured projects benefit not only from EU financial support but also access to fast-track permitting and authorisation procedures at EU and national levels.

The commission has yet to raise formal competition concerns in its assessment of the pipeline extension.