USA desperately tries to bury Russia’s Nord Stream 2 gas pipeline project

The US will expand sanctions against the Nord Stream 2 gas pipeline project. The sanctions will now affect companies that provide services or funding to install equipment on board the vessels that take part in the project. Such a move may permanently halt the construction of the pipeline.

The news to expand the sanctions was reported on the website of the US Department of State. Similar restrictions are to be imposed on the participants of the Turkish Stream and other similar projects.

The Nord Stream-2 gas pipeline provides for the construction of two sections of the gas pipeline system with a total capacity of 55 billion cubic meters of gas per year from the coast of Russia to Germany along the bottom of the Baltic Sea. Originally, the construction of the pipeline system was supposed to be completed in 2019. However, the work on the project was suspended after US Congress passed a package of sanctions against the participants of the project.

The USA remains opposed to the project, claiming that it makes Europe overly dependent on Russian natural gas and increases political pressure on Ukraine, which transits natural gas further to Europe. Kiev and several countries of the European Union share the same position.

“Russia uses its energy export pipelines to create national and regional dependencies on Russian energy supplies, leveraging these dependencies to expand its political, economic, and military influence, weaken European security, and undermine U.S. national security and foreign policy interests. These pipelines also reduce European energy diversification, and hence weaken European energy security,” the US State Department said in a statement.

Russia, Germany, Austria and a number of other countries, whose companies are involved in the construction, insist that this is nothing but a business project.

In late 2019, the United States imposed sanctions on Nord Stream-2, having demanded the companies involved in the construction should immediately stop their works on the project. Allseas, a Swiss company, pulled out of the project almost at once.

Representatives of Russia’s natural gas monopoly, Gazprom, stated that they would be able to complete the construction of Nord Stream-2 independently. For the time being, one needs to finish the construction of the section that is 100 kilometres long. On October 17, German Foreign Minister Heiko Maas said in an interview with RND that the project would be completed.

Turkish Stream gas pipeline trouble

The Turkish Stream gas pipeline system (TurkStream) directly connects gas transportation systems of Turkey and Russia and ensures energy supplies to Turkey, South and Southeast Europe. The project will enable the supplies of up to 31.5 billion cubic meters of natural gas to the region every year.

The offshore section of the system consists of two parallel threads that run along the bottom of the Black Sea. The offshore pipeline section begins near the city of Anapa in Russia and in 930 km comes ashore, near the village of Kiyikoy. “From the receiving terminal in Kiyikoy, one of the two underground onshore pipelines connects to the existing Turkish gas network at Luleburgaz. The other pipeline continues to the Turkish-European border, where it ends,” the website dedicated to the project says.

Bulgaria implemented the capacities enabling it to receive natural gas from the TurkStream (the throughput capacity on the border with Turkey amounts to 19.9 billion cubic meters per year), but then a holdback occurred regarding the expansion of the pipeline to Serbia. Serbia has long reported the completion of the construction of 403 km of the linear part of the continuation of the Turkish Stream on its territory.

In 2020, all the trouble in the implementation of the contracts could be blamed for the pandemic. In 2019, however, the work could not begin due to disputes between contractors.

Almost a year ago, in December 2019, Russian President Putin expressed his harsh views about the construction of the project in Bulgaria. At a joint press conference with Serbian President Aleksandar Vucic, Putin said: “Despite all the assurance and repeated requests to the Russian side to ensure the supply of our natural gas through Turkey to Bulgaria, we can see that the Bulgarian side, strange as it may seem, deliberately delays the implementation of the project on its territory.”

Bulgaria, with the help of the United States, launched a hasty program to diversify its gas supplies. For the time being, Bulgaria receives 100 percent of its natural gas from Russia. Until the end of 2020, Bulgaria is to receive at least a half of those three billion cubic meters from other suppliers. In January 2020, Bulgarian officials stated that Sofia and Washington were developing cooperation in the field of liquefied natural gas (LNG). As much as 50 percent of natural gas consumption in Bulgaria is to be diversified by the end of 2020, Bulgaria’s Energy Minister Temenuzhka Petkova said. In particular, Sofia eyes natural gas from Azerbaijan via TANAP gas pipeline.

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Nord Stream 2 evolves into major battle inside Germany and all of EU

Germany continues the discussion about the completion and commissioning of the Nord Stream 2 gas pipeline. For the time being, it is too early to ascertain that the opponents of the project are gaining the upper hand.

Nord Stream 2 controversy in Germany

On Friday,  Sept., 18, the Bundestag refused to vote on the merits of the Green Party’s proposal to curtail the pipeline project. “We are voting on the submission of the proposal to the relevant committee. This is the faction of the ruling coalition, the Free Democratic Party and the Left faction. Who is against? This is the Alternative for Germany and Union 90/Greens faction. Who abstained? Nobody. The submission was decided,”Bundestag Vice-President Petra Pau, who was chairing the session said, adding that the Bundestag was not voting on the merits on the proposal.

The relevant committee is Bundestag’s economic and energy committee chaired by representative of the Left Party, Klaus Ernst. He is an advocate of the construction of the pipeline.

In addition, on September 18, it became known that at a conference of prime ministers of East German lands in Berlin, six chief representatives from SPD, CDU and the Left spoke in favor of the Nord Streat 2 construction.

In their opinion, this project is of great importance for Germany and many European countries from the point of view of ensuring energy supplies in the future. Therefore, the participants consider the completion of the construction of the gas pipeline “reasonable and correct.” According to the Prime Minister of Mecklenburg-Vorpommern, Manuela Schleswig, Nord Stream 2 was 97 percent complete.

However, it should be clarified that according to Der Spiegel, the vice-premier from the Greens in the governments of the five East German lands called for the termination of construction.

The Green party is the only party in Germany that explicitly advocates the construction of Nord Stream 2 should be stopped. It is worthy of note that the “Greens” were against the project even before Aleksei Navalny’s poisoning.

Germany is not alone

German Chancellor Angela Merkel said earlier that EU countries should jointly decide how to proceed with the construction of Nord Stream 2.

Josep Borrell, High Representative of the European Union, said that the European Union does not have the authority to stop the construction of the pipeline.

“Some of you talk about the possibility of this affecting Nord Stream 2. Once again, this is something that is outside of the possibilities of the European institutions. What I can tell you is that the European Commission has never shown a lot of enthusiasm about this pipeline, which from the Commission we have been considering as not a relevant priority infrastructure. But it is something that is up to the Member States that have been pushing for this infrastructure to be built. As I said, there is the scepticism of the Commission, which has never shown strong support for it,” Borrell said.

Austrian Chancellor Sebastian Kurz expressed his support for the project. Danish Prime Minister Mette Frederiksen suggested revising the project in light of the situation with Aleksei Navalny. She had always been against the project, she added, because, as she believes, Europe should not increase its dependence on Russian natural gas.

It is too early to dot all the i’s in this story. The pipeline systems is almost complete. If the project is stopped, its participants will have to pay compensations, and it goes about 20 billion euros at least. Most likely, it will be Germany that will have to pay the fine from its budget. This is a pretty  good reason not to rush the decision.

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U.S. senators expected to introduce sanctions on Russia’s Nord Stream 2

FILE PHOTO: The logo of the Nord Stream 2 gas pipeline project is seen on a large diameter pipe at Chelyabinsk Pipe Rolling Plant owned by ChelPipe Group in Chelyabinsk, Russia February 26, 2020. REUTERS/Maxim Shemetov

May 29, 2020

(Reuters) – Two U.S. senators are expected to introduce next week sanctions on the Nord Stream 2 natural gas pipeline that Russia is trying to finish, but which Washington has opposed since the Obama era, a source familiar with the matter said on Friday.

The sanctions, which would have to pass Congress and be signed by President Donald Trump, are expected to be introduced as soon as Monday by Senators Ted Cruz, a Republican, and Jeanne Shaheen, a Democrat.

The senators’ offices did not respond to requests for comment. This week, however, both senators indicated they were weighing sanctions on Nord Stream 2, led by state gas company Gazprom <GAZP.MM>, as Russia moves closer to completing the project.

Late last year sanctions sponsored by Cruz and Shaheen halted work by Swiss-Dutch company Allseas on the pipeline that aims to double the capacity of an existing line sending Russian gas to Germany.

Now a Russian pipe-laying vessel aims to finish the remaining 100 miles (160 km) of the project, which would bypass Ukraine by sending gas to Germany under the Baltic Sea. The pipeline could be launched by the end of 2020 or early next year, Russian President Vladimir Putin has said.

Washington has opposed the project, which would tighten Putin’s economic and political grip over Europe.

Kremlin spokesman Dmitry Peskov said after the Reuters story about senators weighing new sanctions that Moscow considers such measures unfair competition and contradictory to international law.

Cruz told the Atlantic Council think tank this month that new sanctions would apply to any ship or any owner who attempts to finish the project. Ship officers would lose their ability to come to the United States and all their assets would be blocked, he said.

Nord Stream 2 did not immediately respond to a request for comment.

(Reporting by Dmitry Zhdannikov in London and Timothy Gardner in Washington; Editing by David Gregorio)

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