When the United States imposed sanctions in December prohibiting outside contractors from working on the Russian Nord Stream 2 pipeline to Germany, Washington hoped it had finally killed the controversial project, which died of stone.
It was wrong. Gazprom, the gas giant controlled by the Kremlin behind the project, called the Washington bluff. By promising to terminate the pipeline by itself, he presented an ultimatum that the United States has long sought to avoid: if you want to stop the pipeline, you must impose sanctions on us.
It is a gamble with potentially huge consequences. Not only does Gazprom supply nearly 40% of European gas, but it also raised 4.75 billion euros to pay Nord Stream 2 from European energy companies Shell, Engie, OMW, Uniper and Wintershall.
Since its announcement in 2015, Nord Stream 2 has been bogged down in geopolitics, pitting Russia against the United States and dividing the EU.
The pipeline would double the amount of gas sent directly from Russia to Germany and reduce the amount pumped by Soviet-era pipelines in Ukraine. As such, it has become a lightning rod for Moscow critics who say that Gazprom seeks both to increase Europe’s dependence on Russian supplies and to harm Kiev by depriving it of transit charges high.
The project survived years of critical rhetoric, legal challenges and reluctance on the part of the Baltic states whose permission was required to start construction. Then, American sanctions forced the Swiss pipe laying company Allseas to withdraw from the project five months ago, with 94% completed, and only 160 km of pipes remaining to be laid at the bottom of the Baltic Sea.
Gazprom now says it will fill this gap – in Danish territorial waters – on its own and prepare the pipeline to begin operations in the spring of 2021.
If it can really do that, it will depend on the Akademik Cherskiy, a layer of pipe that has spent most of the past three months navigating halfway around the planet.
The ship left the Russian Pacific coast near Japan in February to begin a journey of approximately 20,000 nautical miles to the north of Germany, traveling along Africa to avoid the Suez Canal.
But the Akademik Cherskiy is not a comparable replacement for the far superior trade used by Allseas. The ship was bought in 2016 by Gazprom as a last resort if the U.S. sanctions – first imposed in 2014 after Moscow’s annexation of Crimea – were extended to block its use of foreign contractors.
It is an insurance policy that the company hoped never to use. Even with significant upgrades since its purchase, some experts question its ability to get the job done.
“We are forced to look for new solutions to lay the remaining 6% of our pipeline,” Nord Stream 2 spokesperson Jens Mueller said in a statement. “Nord Stream 2 and the companies supporting our project are convinced that putting the gas pipeline into service as soon as possible is in the interest of Europe’s energy security [and] EU consumers. “
“I do not think the project can be stopped,” said Russian Foreign Minister Sergei Lavrov last week.
Some American officials seem to think otherwise. Richard Grenell, the US ambassador to Germany, said this week that Washington plans to impose new sanctions. US Senator Ted Cruz said this month that President Donald Trump would impose sanctions on Gazprom if he completed the pipeline.
“The sanctions against Nord Stream 2 have been approved by the entire US government and there is absolutely no leeway,” said Cruz. “If Gazprom uses the Akademik Cherskiy to complete the Nord Stream 2 pipeline, [the president] must and will impose crippling sanctions on Gazprom. “
This would mark a significant escalation in the six-year sanctions campaign against Moscow. The United States has long resisted similar sanctions against Gazprom’s oil equivalent Rosneft, fearing the impact on the global crude market.
The EU and Germany have condemned Washington’s December sanctions as an unfair imposition of the bloc’s energy policy and would be plunged into crisis by any move to impose sanctions against its main gas supplier.
Gazprom now seems to be banking on its belief that the United States would not go that far.
the Akademik Cherskiy is currently moored in the German port of Mukran, where the logistics base for Nord Stream 2 is located. If it ships soon for Danish pipe-laden waters, the ball will be back in the Washington court.
When the United States imposed sanctions in December prohibiting outside contractors from working on the Russian Nord Stream 2 pipeline to Germany, Washington hoped it had finally killed the controversial project, which died of stone.
It was wrong. Gazprom, the gas giant controlled by the Kremlin behind the project, called the Washington bluff. By promising to terminate the pipeline by itself, he presented an ultimatum that the United States has long sought to avoid: if you want to stop the pipeline, you must impose sanctions on us.
It is a gamble with potentially huge consequences. Not only does Gazprom supply nearly 40% of European gas, but it also raised 4.75 billion euros to pay Nord Stream 2 from European energy companies Shell, Engie, OMW, Uniper and Wintershall.
Since its announcement in 2015, Nord Stream 2 has been bogged down in geopolitics, pitting Russia against the United States and dividing the EU.
The pipeline would double the amount of gas sent directly from Russia to Germany and reduce the amount pumped by Soviet-era pipelines in Ukraine. As such, it has become a lightning rod for Moscow critics who say that Gazprom seeks both to increase Europe’s dependence on Russian supplies and to harm Kiev by depriving it of transit charges high.
The project survived years of critical rhetoric, legal challenges and reluctance on the part of the Baltic states whose permission was required to start construction. Then, American sanctions forced the Swiss pipe laying company Allseas to withdraw from the project five months ago, with 94% completed, and only 160 km of pipes remaining to be laid at the bottom of the Baltic Sea.
Gazprom now says it will fill this gap – in Danish territorial waters – on its own and prepare the pipeline to begin operations in the spring of 2021.
If it can really do that, it will depend on the Akademik Cherskiy, a layer of pipe that has spent most of the past three months navigating halfway around the planet.
The ship left the Russian Pacific coast near Japan in February to begin a journey of approximately 20,000 nautical miles to the north of Germany, traveling along Africa to avoid the Suez Canal.
But the Akademik Cherskiy is not a comparable replacement for the far superior trade used by Allseas. The ship was bought in 2016 by Gazprom as a last resort if the U.S. sanctions – first imposed in 2014 after Moscow’s annexation of Crimea – were extended to block its use of foreign contractors.
It is an insurance policy that the company hoped never to use. Even with significant upgrades since its purchase, some experts question its ability to get the job done.
“We are forced to look for new solutions to lay the remaining 6% of our pipeline,” Nord Stream 2 spokesperson Jens Mueller said in a statement. “Nord Stream 2 and the companies supporting our project are convinced that putting the gas pipeline into service as soon as possible is in the interest of Europe’s energy security [and] EU consumers. “
“I do not think the project can be stopped,” said Russian Foreign Minister Sergei Lavrov last week.
Some American officials seem to think otherwise. Richard Grenell, the US ambassador to Germany, said this week that Washington plans to impose new sanctions. US Senator Ted Cruz said this month that President Donald Trump would impose sanctions on Gazprom if he completed the pipeline.
“The sanctions against Nord Stream 2 have been approved by the entire US government and there is absolutely no leeway,” said Cruz. “If Gazprom uses the Akademik Cherskiy to complete the Nord Stream 2 pipeline, [the president] must and will impose crippling sanctions on Gazprom. “
This would mark a significant escalation in the six-year sanctions campaign against Moscow. The United States has long resisted similar sanctions against Gazprom’s oil equivalent Rosneft, fearing the impact on the global crude market.
The EU and Germany have condemned Washington’s December sanctions as an unfair imposition of the bloc’s energy policy and would be plunged into crisis by any move to impose sanctions against its main gas supplier.
Gazprom now seems to be banking on its belief that the United States would not go that far.
the Akademik Cherskiy is currently moored in the German port of Mukran, where the logistics base for Nord Stream 2 is located. If it ships soon for Danish pipe-laden waters, the ball will be back in the Washington court.