Nord Stream 2 completes work in German waters as US ramps up sanctions again

The Gazprom-led consortium behind the controversial Nord Stream 2 project has announced the completion of the 2.6 km section of pipeline in German waters, edging the project closer to completion.

The pipe-laying vessel Fortuna headed back to the German port of Wismar after completing the short but vital section with construction set to resume in Danish waters sometime later this month.

On January 1, the US Congress voted to override a presidential veto and passed the National Defense Authorization Act (NDAA) into law, which contained a provision applying new sanctions. 

Russia has vowed that it will complete the long-delayed project in spite of the new sanctions which are widely seen as a last-ditch attempt to put an end to the project.

US opposition to Nord Stream 2 is based in concern that it will lead to Russian dominance over Europe's natural gas supplies, as well as damaging Ukrainian interests by rendering the country's gas transport system redundant.

Also read: Russia & Belarus Reach Agreement On Oil & Gas Prices

Kyiv stands to lose significant transit revenues once the project is up and running which, it is feared, will then increase the likelihood of a future escalation in tensions and a possible outbreak of war in the country's east.

The most recent round of sanctions has already had an impact. Yesterday, Norway's DNV GL, which was meant to provide technical and safety certification for the pipeline, pulled out of the project.

"DNV GL will cease all verification activities for the Nord Stream 2 pipeline system in line with sanctions and while sanctions are in place," said in a statement.

"We are implementing a plan to wind down our verification support to the project. As the situation currently stands, DNV GL cannot issue a certificate upon the completion of the pipeline," it added.

Observers have said that while the project could find an alternative company for system certification, a switch may mean it necessary to obtain new permits in Denmark, thus causing risking further delays.

The full impact of the ramped-up sanctions, however, remains unclear. While Washington-based think tank the Atlantic Council have said that the new round of sanctions "means almost certain doom for Putin’s most important energy project", Russia has downplayed their significance. 

“This tool is absolutely uncompetitive,” said Russian energy minister Alexander Novak said, according to TASS. “Everyone understands this, including the countries that are interested in fulfilling the [Nord Stream 2] project, the European countries and companies. They support the project and I’m sure that given this support it will be implemented.”

The Fortuna vessel is set to resume pipe-laying work on January 15 and it is estimated that the remaining 150 km stretch will take three and a half months to complete, with another two months of testing. 

If this timeline is correct, then gas could be flowing from Russia to Germany by the third quarter of this year, meaning the latest round of sanctions has delayed the project by a further three months.

The prolonged geopolitical battle over Nord Stream 2 has aggravated the  Trans-Atlantic relationship, which is already strained by four years of fraying at the edges by a combative Trump administration which took a more adversarial approach to a range of issues including NATO, climate change and trade. 

Also read: $4bn EU tariffs on US products to come into effect

In a commentary written for the Atlantic Council last month, former ambassador Richard Morningstar questioned the aggressive use of sanctions against Nord Stream 2, arguing that the increased strain on US-European relations was not worth the payoff.

“While these sanctions might halt the project for another year—and, possibly, indefinitely—they are also putting a strain on the already fragile transatlantic relationship, especially on US-German ties,” he wrote.

While the incoming Biden administration is likely to reverse many of Trump's policies, it is unlikely that Nord Stream 2 sanctions - which have bipartisan support in the US - will be amongst them.

Back to Homepage

Back to Energy & Utilities

Back to Politics & Economics