Nord Stream 2: new US sanctions won't stop construction / News / News agency Inforos
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Nord Stream 2: new US sanctions won't stop construction

US sanctions pressure on the Nord Stream 2 project is growing, but this does not cancel Russia's plans to finish the gas pipeline's construction

Nord Stream 2: new US sanctions won't stop construction

The high-scale Nord Stream 2 project implementation (about 93%) and Gazprom's readiness to complete the construction make US senators hurry: in late June, Ted Cruz, Jeanne Shaheen, John Barrasso, Ron Johnson and Tom Cotton proposed including additional sanctions against the under-construction gas pipeline in the Baltic into the draft US defense budget for 2020-2021 fiscal year starting October 1.

The third decade of June saw the United States prepare a new sanctions bill for Nord Stream 2. It is softer than a similar package announced in early June, apparently owing to the German authorities' public opposition to Washington's threats.

However, the palette of sanctions proposals against Nord stream 2 expands, with the summarized version yet to be approved by the US leadership.

For the time being, the German authorities are waiting for the US Congress to give a final ruling on new sanctions against the project with a view to taking countermeasures. Speaking before the Bundestag on July 1, German Chancellor Angela Merkel said Berlin considered the Nord Stream 2 with an eye to its economic benefits and deemed its closeout necessary. Sanctions against the project discussed by the US Congress are extraterritorial and run counter to the German legal understanding, Merkel stressed.

On July 15, the US State Department announced the upcoming enforcement of the Countering America's Adversaries Through Sanctions Act (CAATSA) – restrictions will center around the Nord Stream 2 and the second string of the TurkStream. US Secretary of State Mike Pompeo explained that he gave a clear signal to the companies engaged in the mentioned gas pipeline projects as regards the consequences. In general, this is another call by the American authorities on European enterprises to curtail cooperation with Russia in terms of developing gas transport infrastructure for the supply of blue-sky fuel to EU countries.

But the German authorities have once again swiftly fended off: "Berlin has taken into account the statement by U.S. Secretary of State Michael Pompeo regarding the additional sanctions on the Nord Stream 2 project but its stance is unwavering."

Meanwhile, Gazprom has moved a step further towards implementing Nord Stream 2: on July 6, the Fortuna pipe-laying barge got permission from the Danish Energy Agency (DEA) to work on pipeline completion. The project operator asked the Danish regulator to make a relevant amendment to the November 2019 permit for building the pipeline in the Danish exclusive economic zone about a month ago. Now the ship has arrived in the national waters of Denmark, as evidenced by MarineTraffic, the ship-tracking and maritime information service.

However, it is not only the increasing sanctions pressure from the United States that prevents the resumption of work to finish the gas pipeline, but also environmental aspects – work in the Baltic sea may be postponed until September over the seasonal cod spawning.

Gazprom's partners do not yet have a clear insight into the project completion date – for instance, head of the Austrian oil and gas company OMV (one of the project's European partners) Ryan Seele told a press conference that Nord Stream 2 investors will be able to assess the completion date after the US introduces its new sanctions against the project.

And Gazprom's management team is still keeping a positive stance. The giant expects the gas pipeline's commissioning in late 2020 or early 2021. This came in a statement by the company's chief of investor relations Anton Demchenko during a teleconference on June 22.

There is every reason to expect the Nord Stream 2 to be finished at the end of the day. The key pipe-laying company "Akademik Chersky" has been adapted to the American sanctions. The immunity was obtained by switching it to the balance of a company without international activity and not legally associated with the gas holding company. The support barge "Fortuna" has no legal restrictions to connect to pipe-laying operations in the Baltic sea. Even a possible shift of project kick-off to a later date than the first quarter of 2021 is not critical, with Gazprom's transit capacity being sufficient in the face of higher EU demand for gas – these are capacities of the Natural gas transmission system of Ukraine, the TurkStream and Yamal–Europe gas pipelines.

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