Will Nord Stream-2 split EU?

Will Nord Stream-2 split EU?

Estonia's Foreign Minister Sven Mikser demanded to stop the implementation of the Nord Stream-2 project, explaining it by the fact that the pipeline will increase Europe's energy dependence on Russia.

"It's in the interest of the EU to stop the project. We need to work to diversify suppliers and ways of supplying energy resources. Nord Stream 2 is not a step in this direction," he said.

According to him, the Nord Stream-2 is not an economic, but a geopolitical project. "It is Russia's lever to influence the European policy," TASS cited the minister as saying.

Member of the European Parliament from Estonia Yana Toom, in turn, said that the construction of the gas pipeline will continue. "There is a certain split in the European Union regarding the attitude towards Russia and the United States," she said.

Earlier, the U.S. stepped up its opposition to the Nord Stream 2 pipeline, saying the project raises security concerns and that it could draw U.S. sanctions. Russian President Vladimir Putin said that Russia is ready to continue shipping some gas to Europe via Ukraine after the Nord Stream 2 gas pipeline is built, "if it is economically feasible and viable for the companies that operate this project." 

Chief Financial Officer of Nord Stream 2 AG, the operator of the pipeline construction, Paul Corcoran said earlier that Nord Stream 2 could run through international waters if Denmark refuses to grant permission for the gas link to go through its waters.

Corcoran added that Gazprom and its partners have spent half of the budget, 2.4 billion euros, on Nord Stream 2.

"We have up until now 2.4 bln euro from Gazprom and 2.4 bln (euro) from the Western partners. So in total we have 4.8 bln (euro) at the end of June," TASS cited as saying.

"We have received 96% of the pipes, we have concrete coated 55% of those pipes and we mobilized vessels for the pipelines. So we are quite well prepared on track and on time for the project," CFO added. 

Earlier, Danish Prime Minister, Lars Lokke Rasmussen said that his country could pass a law that would ultimately allow the country to block or postpone the implementation of the Nord Stream-2 project on legal grounds. 

The Nord Stream-2 project is an expansion of the existing Nord Stream main gas pipeline linking Russia and Germany. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. It will bypass the transit states - Ukraine, Belarus, Poland and other Eastern European and Baltic countries.

The gas pipeline will pass through the exclusive economic zones and territorial waters of five states - Russia, Finland, Sweden, Denmark and Germany. The pipeline’s length will be more than 1,200 km, throughput capacity - 55 bln cubic meters of gas per year. The pipeline is expected to come into service at the end of 2019.

A senior analyst of 'Uralsib Capital', Alexei Kokin, speaking to Vestnik Kavkaza, noted that the Estonian minister's statement will not affect the implementation of the Nord Stream-2 project. "It does not affect Estonia at all. Therefore, I would not pay much attention to this statement, the prospects for Nord Stream-2 are not bad now," the expert said.

At the same time he recalled that not all countries in Europe are hostile to the project. "There are countries that did not want Nord Stream 2 to be realized, but there are also those who welcome it in every way. Germany, for example, has always been the main driving force of its implementation. Austria is also sympathetic to it. It is obvious that there are countries, interested in the project's implementation, since it provides a sufficiently reliable way of supplying gas. So this statement is not very informative," Alexei Kokin concluded.

Deputy director of energy policy of the Institute of Energy and Finances, Alexey Belogoriev, in turn, recalled that Estonia initially took a hostile attitude towards the Nord Stream - 2 project, therefore, these statements change nothing.

"This is the common position of Estonian politicians, as well as politicians from Latvia, Lithuania and Poland, who opposed the project initially. Although economically they lose nothing and acquire nothing from it. This is a political position that has nothing to do with the economy," the expert explained.

He also noted that a number of EU countries perceive Nord Stream-2 as an economic project, while others view it as purely political.

"Estonia considers the project purely political, while the countries of Western Europe, especially Germany, France, Belgium, even the UK, consider it an economic project," the expert said, adding that many European countries consider Nord Stream 2 more German project than Russian.

"Poland fears the strengthening of Germany's economic role in Central and Eastern Europe, including thanks to the Nord Stream-2," the analyst said.

He said that European countries are ready to buy American LNG as an alternative to Russian gas, but only at competitive prices.

Belogoriev also noted that, in general, the attitude towards the project in Europe has not changed significantly since 2016.