A ‘final showdown’ over the Nord Stream 2 pipeline, a joint project between Russia's Gazprom and five European energy giants, is looming, according to the German newspaper Die Welt.
“Until recently, the German government left open the question of completing the construction of the gas pipeline, but it too will soon have to give a clear and clear answer. So the decisive battle between the United States and Germany for Nord Stream 2 is getting closer,” says the outlet.
In the wake of the recent elections in the US, where the media has projected Democratic presidential candidate Joe Biden as the winner despite current incumbent Donald Trump refusing to concede victory, Berlin has been hoping to improve relations with Washington.
Germany and the US witnessed their relationship deteriorate during Donald Trump’s time in office, with bones of contention such as defence spending, Washington’s decision to withdraw troops from the European country, and the mega gas pipeline Nord Stream 2 fuelling tensions.
As Washington has been taking steps to broaden sanctions against the $10.5 billion project, which aims to turn Germany into a major energy hub for deliveries further west, the US has been pressing Berlin to abandon the project with Russia, citing the "security implications" of depending on Russian gas.
The US has been creating difficulties for the pipeline’s construction since its inception, as the US liquefied natural gas (LNG) industry had been increasingly setting its eyes on the European market.
The German side had planned to "appease" Washington, launching the construction of terminals for the American liquefied natural gas (LNG), but currently the work has stalled, writes the outlet.
It is also noted that in early November, the company responsible for the construction of a terminal for American LNG in the German port of Wilhelmshaven has backtracked on the project.
Plans for an LNG terminal in Wilhelmshaven, Germany are being re-evaluated with hydrogen identified as a potential future focus.https://t.co/QLySwHHuxW #LNG #hydrogenfuel #futurefuels pic.twitter.com/yCqhH4EP82— GreenPort (@GreenPortBiz) November 17, 2020
Plans were being pursued for four LNG terminals in Germany, including Wilhelmshaven, yet Uniper, the lead company on the Wilhelmshaven project, said on 6 November that it will be re-evaluated “because of market players’ reluctance to make binding bookings for import capacities at the planned terminal in the current circumstances.”
“Economic uncertainties have definitely played a role in the current circumstances… Many companies don’t want to make long-term commitments at the moment," project manager Oliver Giese said.
According to the report in Die Welt, Germany now risks the direct threat of sanctions.
Plans to ‘Bury’ Nord Stream 2
Earlier, Bild poured cold water on the hopes of those who believed that Democratic presidential candidate Joe Biden might adopt a more lenient approach to the Nord Stream project, which is already 95 percent complete and is designed to cover Europe's growing natural gas needs at costs lower than that of American LNG.
The German newspaper claimed Joe Biden, if elected to the Oval Office, might be even tougher on the project, seeking to "bury" it at all costs.
Sanctioning insurance and certification companies – a measure that Washington had reportedly already mulled – was suggested as a possible option.
The media outlet referenced the opinion of an aide to ex-US President Barack Obama, Benjamin Schmitt, who claimed both Republicans and Democrats oppose construction of the joint European-Russian project. Schmitt's stance was echoed by Former Secretary-General of NATO Anders Fogh Rasmussen, who voiced concerns that potential future US sanctions might hurt Dutch certification company Det Norske Veritas.
Attempts to Derail Nord Stream 2
Nord Stream 2, the 1,230 km pipeline project between Russia's Gazprom, Germany's Uniper and Wintershall, Austria's OMV, France's Engie, and UK/Dutch energy conglomerate Royal Dutch Shell, an agreement on which was signed in 2015, is expected to double the 55 billion cubic metres of gas per year capacity of the existing Nord Stream network.
In a bid to stop the project, the US imposed sanctions on companies that have links to Nord Stream 2, including firms providing services or funds to upgrade or install equipment on ships for laying the pipeline.
Swiss pipelaying company Allseas was forced to quit the project in December 2019 over the threat of looming sanctions. In response, Russia sent its Akademik Cherskiy pipe-laying ship to the Baltic Sea to prepare to complete the project.
In October, Washington broadened its sanctions against the project, justifying the restrictions via the ‘Protecting Europe’s Energy Security Act of 2019’. This time it targeted companies which supply the equipment for the construction of the pipeline, and the funding for the ships working on the almost-completed project.
Moscow has branded the US sanctions a glaring example of its “unfair competition” practices, while repeatedly stressing that the measures would not derail the project.
In response to pressure from Washington over the project, European countries supporting it, such as Germany, argued that the Nord Stream 2 was a purely economic project and have promised that European energy supplies are well-diversified.
Germany has also reaffirmed its commitments to Nord Stream 2, with German Foreign Minister Heiko Maas reiterating in October in an interview for media outfit RND that Nord Stream 2 “will be completed”, adding that only Berlin has the right to make independent decisions related to its energy security.