Russia will restart construction of its Nord Stream 2 gas pipeline to Germany this week in the face of US sanctions that have paused construction for more than a year. Kremlin-controlled gas group Gazprom will commence pipe laying in a section of the Baltic Sea administered by Denmark on Friday, despite measures from Washington designed to cripple the politically divisive project financed by five of Europe’s biggest energy companies.
The US, backed by Poland and other eastern EU states, claims the pipeline is a political project designed to increase Europe’s reliance on Moscow and bypass already existing pipelines through Ukraine. Russia and Germany say it is a purely commercial initiative to meet future higher gas demand in Europe. The €9-5bn pipeline has long been one of Europe’s most hotly debated geopolitical issues and a bellwether for relations between Moscow and EU states.
But the Donald Trump administration’s decision to impose sanctions against the pipeline, while also promoting exports of its own gas to Europe, sparked intense arguments over Europe’s right to choose its own energy supplies and broader commercial relations with the US. Those sanctions have delayed the pipeline beyond its initial planned opening date of mid-2020, and forced Gazprom to adjust its approach to accommodate for the loss of foreign contractors, while Washington has vowed to keep imposing restrictions necessary to block its completion or usage.
“The US sanctions will delay the launch of the project but will not stop its completion. Ultimately, Moscow, with the help of Berlin, will find ways to bypass the sanctions,” said Naz Masraff, director for Europe at Eurasia Group, a risk consultancy.
Work on the 1,230km-long pipeline was abruptly halted in December 2019 when Swiss pipe-laying company Allseas abandoned the project to avoid US sanctions designed to punish companies assisting in construction, with 94 per cent of the length completed. That forced Gazprom to find and prepare its own vessels to lay the remaining 120km on the seabed.