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Released July 23, 2021 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany and the U.S. have agreed a deal on the controversial Russian gas pipeline, Nord Stream 2, into Europe, which might finally end the harmful trade sanctions that have damaged relations between the U.S. and the European Union (EU) in recent years.
The deal centres on preventing Russia from using the pipeline as a political weapon by withholding gas supplies and increasing support to Ukraine which was traditionally the main gas transit route for Russian gas into Europe. The deal will allow for the completion of the last few kilometres of the $11 billion pipeline pipeline, which runs 1,200 kilometers from southwest of St. Petersburg through the territories and waters of a number of European Union (EU) countries before ending at Greifswald on the German coast. The twin 48-inch wide pipelines running in parallel will double the capacity of the original Nord Stream pipeline to 55 billion cubic meters (Bcm) of natural gas per year. The EU and U.S. have condemned Russia's annexation of part of the Crimea region, which has led to open fighting in recent years, impacting Ukraine's energy security and economy.
"The United States and Germany are united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools," read a joint statement from both governments. "Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector, including gas, and/or in other economically relevant sectors. This commitment is designed to ensure that Russia will not misuse any pipeline, including Nord Stream 2, to achieve aggressive political ends by using energy as a weapon."
Industrial Info reported in May that some of the sanctions against companies working on the pipeline, brought in by former U.S. President Trump's administration, were lifted by President Joe Biden's administration. The U.S. is actively working to improve relations with the EU and trade partner Germany, which have supported the pipeline and issued counter-sanctions against leading U.S. products over the past year. For additional information, see May 27, 2021, article - Biden Lifts U.S. Sanctions Against Nord Stream 2 Pipeline.
As part of the deal, Germany and the U.S. have agreed to establish and administer a $1 billion Green Fund for Ukraine to support the country's energy transition, energy efficiency, and energy security. Both parties will aim to promote and support investments of "at least $1 billion," including from third parties such as private-sector entities. Initially, Germany has pledged an initial donation to the fund of at least $175 million and will work toward extending its commitments in the coming budget years. The fund will promote the use of renewable energy; facilitate the development of hydrogen; increase energy efficiency; accelerate the transition from coal; and foster carbon neutrality. In addition, Germany will continue to support bilateral energy projects with Ukraine, especially in the field of renewables and energy efficiency, as well as coal transition support, including the appointment of a special envoy with dedicated funding of $70 million.
The statement added: "Germany is also ready to launch a Ukraine Resilience Package to support Ukraine's energy security. This will include efforts to safeguard and increase the capacity for reverse flows of gas to Ukraine, with the aim of shielding Ukraine completely from potential future attempts by Russia to cut gas supplies to the country. It will also include technical assistance for Ukraine's integration into the European electricity grid, building on and in coordination with the ongoing work by the EU and the U.S. Agency for International Development."
Nord Stream 2 is 50% owned by Russia's state-owned oil and gas giant Gazprom (PINK:OGAZPY) (Moscow), and 50% is held by five European oil and gas companies: Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria), BASF/Wintershall (Ludwigshafen, Germany) and ENGIE (EPA:GSZ) (Paris, France).
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The deal centres on preventing Russia from using the pipeline as a political weapon by withholding gas supplies and increasing support to Ukraine which was traditionally the main gas transit route for Russian gas into Europe. The deal will allow for the completion of the last few kilometres of the $11 billion pipeline pipeline, which runs 1,200 kilometers from southwest of St. Petersburg through the territories and waters of a number of European Union (EU) countries before ending at Greifswald on the German coast. The twin 48-inch wide pipelines running in parallel will double the capacity of the original Nord Stream pipeline to 55 billion cubic meters (Bcm) of natural gas per year. The EU and U.S. have condemned Russia's annexation of part of the Crimea region, which has led to open fighting in recent years, impacting Ukraine's energy security and economy.
"The United States and Germany are united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools," read a joint statement from both governments. "Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions, to limit Russian export capabilities to Europe in the energy sector, including gas, and/or in other economically relevant sectors. This commitment is designed to ensure that Russia will not misuse any pipeline, including Nord Stream 2, to achieve aggressive political ends by using energy as a weapon."
Industrial Info reported in May that some of the sanctions against companies working on the pipeline, brought in by former U.S. President Trump's administration, were lifted by President Joe Biden's administration. The U.S. is actively working to improve relations with the EU and trade partner Germany, which have supported the pipeline and issued counter-sanctions against leading U.S. products over the past year. For additional information, see May 27, 2021, article - Biden Lifts U.S. Sanctions Against Nord Stream 2 Pipeline.
As part of the deal, Germany and the U.S. have agreed to establish and administer a $1 billion Green Fund for Ukraine to support the country's energy transition, energy efficiency, and energy security. Both parties will aim to promote and support investments of "at least $1 billion," including from third parties such as private-sector entities. Initially, Germany has pledged an initial donation to the fund of at least $175 million and will work toward extending its commitments in the coming budget years. The fund will promote the use of renewable energy; facilitate the development of hydrogen; increase energy efficiency; accelerate the transition from coal; and foster carbon neutrality. In addition, Germany will continue to support bilateral energy projects with Ukraine, especially in the field of renewables and energy efficiency, as well as coal transition support, including the appointment of a special envoy with dedicated funding of $70 million.
The statement added: "Germany is also ready to launch a Ukraine Resilience Package to support Ukraine's energy security. This will include efforts to safeguard and increase the capacity for reverse flows of gas to Ukraine, with the aim of shielding Ukraine completely from potential future attempts by Russia to cut gas supplies to the country. It will also include technical assistance for Ukraine's integration into the European electricity grid, building on and in coordination with the ongoing work by the EU and the U.S. Agency for International Development."
Nord Stream 2 is 50% owned by Russia's state-owned oil and gas giant Gazprom (PINK:OGAZPY) (Moscow), and 50% is held by five European oil and gas companies: Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria), BASF/Wintershall (Ludwigshafen, Germany) and ENGIE (EPA:GSZ) (Paris, France).
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
