"The likelihood of completion is high": Biden sanctions will not stop Nord Stream 2

The United States announced new sanctions against Nord Stream 2. 18 European companies withdrew from the project. Will Washington be able to bury the Russian-German gas pipeline? Vestnik Kavkaza was looking for the answer to this question with the help of energy expert Stanislav Mitrakhovich

Clouds are gathering again over Nord Stream 2. Threats launched from the west coast of the Atlantic scared the Europeans in earnest. On February 23, the US State Department made it clear that the US, if necessary, can take additional measures to stop the laying of a gas pipeline from Russia to Germany along the bottom of the Baltic Sea.

"We will continue to observe, evaluate, if there are grounds for additional political responses, we will not hesitate to accept them," said State Department spokesman Ned Price.

Long list

Possible sanctions would affect the participants of the Nord Stream 2. Price announced a list of 18 European companies that have withdrawn from the project to avoid American restrictions. Among them: insurance companies headquartered in the UK, Swiss Zurich Insurance Group, French Axa Group and German concerns Bilfinger SE and Munich Re Syndicate. It is noteworthy that the information about the withdrawal of European companies from the project we learn from the lips of the Americans, and not from these firms themselves.

Russian journalists decided to clarify how the information corresponds to reality. It turned out that Anthony Blinken's press secretary was not lying. Thus, the insurance company Munich Re Syndicate Ltd. confirmed to Interfax the termination of cooperation with the Russian gas pipeline. The data on the Zurich Insurance Group are similar to the truth. Back in January, it was reported that this Swiss company had stopped providing insurance services due to the threat of sanctions from Washington. Apparently, the sanctions frightened not only insurers, but also financiers. The very next day after the statement of the State Department, the German concern Wintershall Dea announced the completion of investments in the gas pipeline. He has already invested 730 million euros, but does not plan further investments.

Energoexpert: No need to overestimate the sanctions

Stanislav Mitrakhovich, a leading expert of the National Energy Security Fund (NESF), a lecturer at the financial university under the government of the Russian Federation, believes that one should not overestimate the harmfulness of the decisions of European companies.

“There are companies that have already completed their work. For example, Danish Ramboll. She fulfilled her environmental impact assessment obligations and withdrew from the project because her work ended back in 2016. Wintershall has already contributed its funding. [The completion of her investment] is not of fundamental importance, "he said in an interview with Vestnik Kavkaza.

The exit of European insurers is justified by their fears of being subject to US sanctions in the future, Mitrahovich said: “There is a gradual exit of insurance companies that are planning further work with the Americans. They want to remove all risks, play it safe, and once again not be subject to sanctions. It was known for a long time that insurance and certification companies could withdraw from the project ”.

Deja vu

The current situation around Nord Stream 2 is somewhat similar to the one that happened at the end of 2019. Then, after Donald Trump approved the defense budget, which contained sanctions against SP-2, the Swiss company Allseas announced the suspension of pipe-laying. Moreover, her decision followed even before the document was signed by the former US president. The new head of the White House, Joseph Biden, has promised to be softer with the Europeans and take into account their interests. But, as you can see, his strategy in relation to the SP-2 is exactly the same. The only difference is that Biden does not confront Europe with a fact and consults with its companies in advance so as not to expose them to harm.

Trump's decision has slowed down the laying of the remaining 160 km of the 1200 km pipeline for more than a year. Construction work was completed in Danish waters on December 21, 2019. However, even then Russia announced that it would complete the construction of Nord Stream 2 itself. After obtaining the necessary permission, the Russian pipe-laying vessel Fortuna began construction work on January 24, 2021 and conducted sea trials. The laying of the gas pipeline itself resumed on 6 February. Earlier in December 2020, Fortuna laid 2.6 km. The project is 94% complete. Only 150 km are left until its completion. From the bottom 120 km in the waters of Denmark and 30 km in Germany. Completion of construction work in Danish waters is expected by the end of May, and in Germany by June. The laying speed without taking into account bad weather and technical difficulties per day is approximately 0.4 km.

What's next?

The day before the State Department's announcement, it became known that the US Treasury had included the pipe-laying vessel Fortuna on another sanctions list under the European Energy Security Protection Act (PEESA). Stanislav Mitrakhovich is sure that these restrictions will not in any way affect the work of the Russian barge, because it "is already on the tough sanctions list."

The energy expert doubts that the latest decisions of Washington will bury SP-2: “Russia will look for a replacement. These can be companies that agree to take risks and will not work with American companies later, or nominee companies. "

Support can also be provided by the German Regional Environmental Fund of Mecklenburg-Western Pomerania, established in early January. His list of tasks includes "a contribution to the continuation of the construction of the Nord Stream 2 gas pipeline." The decision of the German authorities remains the main factor in the successful implementation of the pipeline under the Baltic Sea.

“The most important thing is that the Germans are interested in the project. While this is so, the likelihood of completion is high. I believe that this year even one line of the pipeline may be launched. If the Greens won in the autumn elections to the Bundestag, then it would be a different story, ”added Mitrahovic.

Earlier, the official representative of the Russian Foreign Ministry, Maria Zakharova, called the US sanctions undermining the principles of "free trade and competition" and an attempt to "subordinate the laws of the market to their own geopolitical interests against the will of sovereign countries." Russian President Vladimir Putin believes that opponents of the construction of the SP-2 want to make Moscow pay for the West's geopolitical project in Ukraine.