Polands competition watchdog has fined russias state-controlled gas giant gazprom 29bn zlotys (6.5bn) for going ahead with the construction of the nord stream 2 pipeline without securing its approval.
The pipeline will double moscows capacity to ship gas directly from russia to germany but is fiercely opposed by poland and other central european states that argue it will increase the eus energy dependence on russia.
Wednesdays fine is the largest ever by polands competition regulator uokik and comes just weeks after the poisoning of kremlin critic alexei navalny gave renewed impetus to a debate in germany about the merits of the controversial 9.5bn project.
As well as fining gazprom, uokik imposed penalties totalling 234m zlotys on the five western companies engie, uniper, omv, shell and wintershall that are co-financing the project.
As far as energy security is concerned, the undertaking splits europe into two parts, said tomasz chrostny, head of uokik. it is astounding that western corporations fail to understand that, and participate in an undertaking that not only disturbs competition on the market but also poses a threat to europes energy security.
Mr chrostny ordered the companies to terminate financing contracts linked to the project within 30 days, to reinstate the state of competition from prior to the concentration.
Gazprom said uokiks decision was based on incorrect information and that it would appeal, a move that would delay any legal enforcement of the decision.gazprom fundamentally disagrees with the position of the polishanti-monopoly authority, the company said in a statement. the projectwas implemented not by a joint venture, but by a subsidiary of gazpromwith the attraction of debt financing...[the company] did not violatethe anti-monopoly legislation of the republic of poland.
The kremlin added on wednesday that it had no doubt gazprom would take the necessary legal countermeasures.
The us has also been a vociferous opponent of the project. officials said in july that washington would toughen itssanctions regimefor companies helping russia complete the pipeline.
Shares in gazprom, which is 50.2 per cent controlled by the kremlin, were down 1.9 per cent in early-afternoon trading in moscow.
However, analysts said this was less to do with the potential financial impact of the fine than general opposition to nord stream 2.we are not lawyers but the fine seems too large to be realistic, said ron smith, executive director at bcs global markets in moscow. tous it seems engineered more to generate headlines than in anyexpectation of gazprom ever actually paying such a fine.
Mr smith added that even if the fine was pursued to the judicial end by both sides, we wouldnt expect a final decision for many years.
Omv said it would analyse the decision but was of the clear opinion that it has complied with all applicable laws. shell said it strongly disagreed with the decision and was reviewing its next steps.
Wintershall said that uokik had taken an "unconventional" approach, and that it reserved the right to take legal steps in response.
Engie and uniper did not immediately respond to requests for comment.