The European Commission is expected to sue Germany for charging its neighbors an extra fee for buying gas from its storage, seen as flouting the EU's single market rules, two sources familiar with the matter said.
The sources said the suit, known as an infringement procedure, could be launched as early as in the next few days.
The German tariff is a legacy of the European energy crisis that peaked in 2022 after Moscow slashed gas flows to Europe and an undersea explosion shut down the Nord Stream pipeline from Russia to Germany - the route for 15% of Europe's gas imports.
To recoup the billions of euros it spent on buying non-Russian gas at elevated prices to fill its storage caverns - the biggest of any country in the EU - Germany introduced what it termed a "neutrality charge" on gas sales to its neighbors.
The extra fee has more than tripled since it was introduced in October 2022, which some governments have said goes against EU single market rules that forbid any tariffs on trade between the bloc's countries.
"We remain in touch with the German authorities on this matter, including at political level...we do not speculate on the possible opening of infringement procedures," a spokesperson for the Commission said.
A spokesperson for Germany's economy and climate ministry said the levy was nondiscriminatory and other EU countries had benefited from Germany rapidly filling its vast gas storage.
"This measure has made a decisive contribution to European security of supply and price stabilization," the spokesperson said in an emailed statement.
The EU's formal infringement process begins with a notice requesting information, followed by a request to comply with EU law before the matter is referred to the European Court of Justice. The procedure can take months.
The Czech Republic, Austria, Slovakia and Hungary in particular have been pushing the Commission to take action against the German levy.
EU energy regulator ACER has said such charges resulted in higher gas prices in some countries, and should not be applied on cross-border trade.
Energy Commissioner Kadri Simson said last month the levy put the bloc's solidarity at risk and hurt efforts to cut the EU's reliance on Russian gas.
"Trade between member states is not restricted by the levy, so there is no justification for switching to Russian gas," the spokesperson for Germany's economy and climate ministry said.
Recommended Reading
Occidental Explores Sale of Permian Assets Worth Over $1B, Sources Say
2024-05-03 - Occidental Petroleum is exploring a sale of assets in the Barilla Draw region of Texas, which is located within the Delaware portion of the Permian Basin.
Marketed: Navigation Powder River Eight Leasehold Lots in Wyoming
2024-04-09 - Navigation Powder River has retained EnergyNet for the sale of eight non-producing federal leasehold lots in Converse and Campbell counties, Wyoming.
Making Bank: Top 10 Oil and Gas Dealmakers in North America
2024-02-29 - MergerLinks ranks the key dealmakers behind the U.S. biggest M&A transactions of 2023.
EIA: E&P Dealmaking Activity Soars to $234 Billion in ‘23
2024-03-19 - Oil and gas E&Ps spent a collective $234 billion on corporate M&A and asset acquisitions in 2023, the most in more than a decade, the U.S. Energy Information Administration reported.
Is Double Eagle IV the Most Coveted PE-backed Permian E&P Left?
2024-04-22 - Double Eagle IV is quietly adding leases and drilling new oil wells in core parts of the Midland Basin. After a historic run of corporate consolidation, is it the most attractive private equity-backed E&P still standing in the Permian Basin?