Anger in Moscow, joy in Kiev and nervousness in Berlin. The new sanctions imposed by the US Congress against Russia's gas pipelines caused concern in Europe. Soon, owners of specialized ships for the construction of pipelines on the seabed face severe penalties when doing business with Russia. We are talking about entry bans, but also possible transactions and transactions of those companies could be blocked.
The goal of the sanctions is clear. It concerns the tubes of Nord Stream 2 and Turkish Stream, with which Russia directly and without Eastern European transit countries like Ukraine and Poland on the German and European gas market strives. Especially Nord Stream 2 is controversial. So far Russia has no own ships to build such pipelines completely single-handedly. Theoretically, the sanctions could have the makings of stopping the construction of the Nord Stream extension.
Pawel Zawalnyj, chairman of the Duma Energy Committee, said that the pipeline would be completed in any case. The Russian Deputy Foreign Minister admitted to saying that the move was expected. "The US is trying to gain unilateral benefits in the gas sector at the expense of end users in Europe," Alexander Gruschko said.
According to the official Moscow reading, Washington is mainly against the project because the US wants to get rid of its own liquefied gas in Europe. "The German-Russian Foreign Trade Chamber in Moscow reacted similarly." Germany and Europe are being pushed around at the moment, unfortunately, "said Mathias Schepp, chairman of the board AHK Russia. The majority of Germans support the project. A good suggestion for politicians in Berlin and Brussels is therefore to stop buying American LNG if the USA Nord Stream 2 torpedoes. Only the Ukrainian President Volodymyr Selensky thanked in a message to the US for the "support of sanctions".
The pipeline will probably be built anyway
Meanwhile, among industry experts, it's almost certain that the pipeline will be completed by the end of the year. At present there are two laying ships of the Swiss shipping company Allseas on the construction site about 100 kilometers off the German coast. The construction progress is about five kilometers per day. "The two ships still need about 20 days," says Mikhail Krutikhin of the independent consulting company RusEnergy. Krutikhin is one of the biggest critics of the project because of its immense costs. However, he does not believe in the success of the sanctions.
It is still completely unclear when the sanctions will actually be signed and when they will come into force. Probably the process will drag on until next year. In case of cases, however, Gazprom had already put in the port of Sassnitz on Rügen already the Russian ship Fortuna in position. This could at least handle the last piece. "Even if the sanctions are implemented quickly, the completion is guaranteed at the time," assures Krutikhin.
This optimism also appears to be justified by a look at the US National Defense Authorization Act, part of which sanctions have been adopted. Among other things, this refers to the fact that only the laying of tubes from a depth of about 30.5 meters is punishable. That would preclude work near the coast from sanctions. At the same time, companies will be given a 30-day transitional period to stop their dealings with Russia. These restrictions should be sufficient to avoid jeopardizing the completion of the new tubes.
Maybe the pipeline does not pay off for Russia at all
So far, Gazprom has managed to circumvent any restrictions imposed on its export project. Since Nord Stream and Nord Stream 2 in particular, the two projects have been showered with criticism. In Russia, many skeptics are convinced that the pipelines of the feeder on Russian territory make no economic sense and have only given a few construction companies billion-dollar orders at the expense of the state budget. Abroad, the criticism is aimed at the growing Russian market share in Europe. This increases the dependence on Russia and gives the Kremlin additional revenue. At the same time, Russia's neighbors could face political dispute, at least in theory, more easily with a stop to supply if they are no longer used as transit countries.
Especially after the outbreak of the Ukraine crisis Nord Stream also became a target of the US. In 2017, the US threatened sanctions on companies supporting Russia in the construction of the pipeline. Groundbreaking US sanctions are the original partners, including Wintershall and Uniper from Germany and OMV from Austria as shareholders of Nord Stream2 AG. Since then, they have been lending to the project. Later, concerns from the Danish environmental authorities stopped the project temporarily. Only in the fall, there was the permit.
However, the biggest ally of Russia in this matter remains the German Federal Government. She helped the Russian company Nord Stream AG bypass the European gas regulations. These actually provide for the gas supplier and pipeline owners to be independent from each other this year - which would not be the case with Nord Stream 2. So far, this only applied to pipelines that have their start and end points in Europe. However, when transposing the Directive into German law, on which the Bundestag voted on 13 November, the Federal Government has secured the legal option of granting exemptions for third country pipelines from this regime for a maximum period of 20 years. Although Nord Stream 2 is not mentioned in the corresponding amendment. Other pipelines for which this regulation would be necessary are currently not in sight.