Germany Rejects New U.S. Sanctions on Nord Stream 2 Pipeline

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany has warned that new U.S. sanctions endanger the future of the almost complete Nord Stream 2 pipelines from Russia into Europe and represent "grave interference" in Europe's energy policy and sovereignty.

Germany is a key backer of the project, which comprises two parallel pipelines running 1,230 kilometres (km) for the transport of gas from Russia via Germany to Europe. It passes through Finnish, Swedish, Danish and German marine areas before going ashore at the German coast. It has only 160 km of underwater pipeline left to install before reaching the receiving terminal in northern Germany. In a recent parliamentary meeting, Niels Annen, minister of state in Germany's Foreign Ministry, said: "The fact that the U.S. Congress acts as a regulator in European affairs is absurd. Just imagine, if we adopted a resolution on U.S. energy security in the Bundestag, We're talking about direct and grave interference in Germany and Europe's sovereignty and energy policy."

German Foreign Minister Heiko Maas, commented: "We will not change our decision on this project. We believe that it is an issue of diversification of our energy supply sources."

The 9.5 billion-euro ($10.5 billion) Russian-led pipeline has been in President Trump's crosshairs for the past year and its completion was delayed by an initial round of sanctions imposed in January. Those sanctions forced Swiss-based pipe-laying and decommissioning firm Allseas, which was responsible for pipe-laying on Nord Stream 2 and TurkStream, to stop working both projects to comply. For additional information, see January 6, 2020, article - U.S. Sanctions Stop Nord Stream 2 Pipe-laying.

New sanctions under the Protecting Europe's Energy Security Clarification Act will extend sanctions to include penalties on companies involved in pipe-laying activities and those offering underwriting services, insurance or reinsurance services. It adds sanctions related to companies offering any services or facilities for the vessels being used, including welding equipment, retrofitting or tethering of the ships.

The pipelines can transport 55 billion cubic meters (Bcm) of natural gas per year, doubling the capacity of the existing Nord Stream pipeline. Russia's oil and gas major Gazprom (PINK:OGAZPY) (Moscow) holds a 50% stake in the pipeline, and the rest is owned by five European Union (EU) shareholders, including 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).

Recently, Nord Stream 2 overcame its final stumbling block when Denmark granted permission to use pipe-laying vessels with anchors to complete the final stretch of the gas pipeline in Danish waters. This is important since the use of more advanced vessels using self-positioning technology are affected by the U.S. sanctions. Russia's pipe-laying ship Academic Cherskiy spent months travelling from Siberia earlier this year and is moored near Germany's Mukran port in the Baltic, the staging area for the pipeline's construction.

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