Russia's state-owned gas company Gazprom has said that it will complete the construction of the controversial Nord Stream 2 pipeline under the Baltic Sea without the help of foreign companies in a move that will be hailed as a victory by the US, which imposed sanctions to try to end the project.
Photo: Gazprom
“The Nord Stream 2 project, which is already 94% complete, will be finished by the Russian side,” Gazprom’s deputy head Elena Burmistrova said at the European Gas Conference Vienna.
The admission by Gazprom is the first such acknowledgement that US sanctions on the project have had an impact on its completion.
Sanctions were imposed by Washington last month against companies involved in construction of the project citing Russia's alleged interference in the 2016 US elections. The Trump administration has also been vocal about its concerns that the pipeline would threaten Europe's energy security, making it highly dependent on Russian gas.
The Nord Stream 2 project is headed by by Gazprom with additional financing coming from Royal Dutch Shell, France's Engie, Austria's OMV and Germany's Uniper and Wintershall. The international contractors working on the pipeline suspended their work following the announcement of US sanctions.
The project's critics say that it is designed to weaken the Ukrainian economy which makes around €2.7-billion annually from gas transit fees across its territory from Russia to Europe.
The Kremlin has repeatedly stated that the project is a purely commercial venture.
“Half a century ago, when pipelines to Europe were being built, no one could think they would be torn by political disagreements,” Burmistrova said, adding that February 1 will be the 50th anniversary of the "legendary" agreement between the Soviet Union and Germany to supply gas in return for pipelines.
The details of how Nord Stream 2 will be completed without foreign assistance have not been disclosed but a range of options are being discussed including using Gazprom-owned vessels and Russian pipe laying business. However, none are as advanced as the vessels used by Allseas.
Swiss group Allseas had been the main contractor laying the pipeline across the Baltic Sea but immediately suspended work after the US sanctions were announced.
Despite the comments by Burmistrova, Nord Stream 2 AG, the 100% Gazprom-owned pipeline operating company based in Switzerland insisted that it would complete the pipeline together with the five European energy companies who had already given substantial investment.
The 1,230 km (764 miles), 55 billion m³ pipeline was originally scheduled for completion by the end of 2019 - the same time that the ten year gas transit contract with Ukraine was set to expire.
Following a delay in receiving permission from Denmark to build in its waters, the construction work stretched into 2020.
With a new transit contract in place between Gazprom and Ukrainian counterpart Naftogaz, officials in Russia estimate that the project will be completed by the end of 2020 or early 2021.
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