The long-standing threat of Washington's sanctions against the project of the transbaltic Nord Stream 2 gas pipeline has been implemented technically: on December 21, the US Department of the Treasury reported that sanctions against the Nord stream 2 and Turkish stream pipelines entered into force and that the US required the companies engaged in laying them to immediately stop construction activities.
US President Donald Trump has signed the defense budget stipulating for restrictive measures against the Nord stream 2. Swiss company Allseas dealing with pipeline installation has right away suspended its offshore work and is now waiting for the American authorities to explain the way the sanctions are going to be applied.
The European Union and Germany have criticized Washington's targeted sanctions. But this does not have any effect at this stage.
The US authorities expect their initiatives to hinder the final completion of the Nord Stream 2, since Russia will prove unable to unaidedly lay pipes at sea. In fact, there's more to this than meets the eye.
Russian Prime Minister Dmitry Medvedev said there was no doubt about the completion of the Nord Stream 2 gas pipeline. "Gazprom has alternative options for how to lay it. It will take a little more time, but that's no big deal," the Prime Minister of the Russian Federation concluded.
The business press reported that Russia had its own pipe-laying machine for shallow water in store – in Danish waters, the laying of Nord stream 2 pipes is carried out near the surface. Moreover, there is information on the possibility of involving a special barge for field-specific work. But it is reasonable to keep this scenario under wraps so far. As well as Russia's plans to build a new special-purpose vessel of its own, with head of the United Shipbuilding Corporation Alexey Rakhmanov declaring determination to accept such an order from the authorities. He said the pipe-laying ship's design engineering may take some 1.5-2 years, with another four years to build it.
Therefore, it is still preferable for Russia to try to reach a consensus with the Europeans on completing the gas pipeline without changing the pipe-layers. This was by the way touched upon by Deputy Prime Minister Dmitry Kozak in his December 25 interview with Rossiya-24 TV channel: "The United States could ratchet up pressure on Russia’s Nord Stream 2 gas pipeline. However, energy security is Europe's top priority regardless of US sanctions. We are sure that we will solve this problem and reach compromise in cooperation with European countries, with the European Union."
According to head of the Energy Ministry of the Russian Federation Alexander Novak, it is premature to say that the Allseas contractor will fail to complete the Nord Stream 2. " They have suspended the works in order to eliminate sanctions risks. The company has demanded clarification from the US Treasury Department to understand whether it will be able to continue the work or not. Regardless of the sanctions the pipeline will be built, just less than 160 km of the pipeline needs to be laid," the Minister stated.
The US Treasury noted that after Donald Trump's signing of the defense law, the sanctions clause had immediately come into force. "Bona fide exceptions" are said to be allowed for 30 days, but only if the termination of construction activities requires some time to ensure the safety of the pipeline, workers and specialists, as well as to protect the environment from harm.
It is important that the lion's share of the Nord Stream 2 project is ready, that is about 92 -93%. Moreover, now there is no need to precipitate the construction – on December 20, following consultations in Berlin and Minsk, Moscow and Kiev signed a Protocol of agreements to continue gas transit via the territory of Ukraine. Thus, the Ukrainian transit contract to be formalized by the end of 2019, now allows Gazprom hold out hope for at least an additional year to complete the Baltic sea pipe.