Dispute over Nord Stream 2 nears completion

Dispute over Nord Stream 2 nears completion

German Chancellor Angela Merkel called Russian President Vladimir Putin tonight to talk about Nord Stream 2 and Ukraine. According to the Kremlin press service, the leaders are satisfied with the approaching completion of the gas pipeline.

Putin noted the consistent commitment of the German side to the implementation of the project, which is exclusively commercial in nature and aimed at strengthening the energy security of Germany and the European Union. Merkel spoke about the recent talks with US President Joseph Biden in Washington. Putin and Merkel also discussed the possibility of extending the agreement between Gazprom and Ukrainian Naftogaz on the transportation of gas through Ukrainian territory after 2024.

The United States and Germany are expected to announce in coming days a deal resolving their long-standing dispute over Russia's $11 billion Nord Stream 2 natural gas pipeline, sources familiar with the matter said on Monday, EU Reporter writes. President Joe Biden and German Chancellor Angela Merkel failed to settle their differences over the undersea pipeline when they met last week, but agreed Moscow must not be allowed to use energy as a weapon against its neighbors.  A deal is now in sight after discussions among US and German officials about US concerns that the pipeline, which is 98% complete, will increase Europe's dependence on Russian gas, and could rob Ukraine of the transit fees it now collects on gas pumped through an existing pipeline.

An agreement would avert the resumption of currently waived US sanctions against Nord Stream 2 AG, the company behind the pipeline, and its chief executive. Details were not immediately available, but the sources said the deal would include commitments by both sides to ensure increased investment in Ukraine's energy sector to offset any negative fallout from the new pipeline, which will bring gas from the Arctic to Germany under the Baltic Sea. "It's looking good," said one of the sources, who spoke on condition of anonymity because the talks are still ongoing. "We expect those conversations to reach resolution in coming days." A second source said the two sides were nearing an agreement that would assuage concerns raised by US lawmakers, as well as those of Ukraine.

Derek Chollet, a senior adviser to Secretary of State Antony Blinken, will meet with senior Ukrainian government officials in Kyiv on Tuesday and Wednesday to reinforce the strategic value of US-Ukrainian ties, the State Department said on Monday. One of the sources said the United States was eager to ensure that Ukraine supported the expected agreement with Germany. The Biden administration concluded in May that Nord Stream 2 AG and its CEO engaged in sanctionable behavior. But Biden waived the sanctions to allow time to work out a deal and keep rebuilding ties with Germany that were badly frayed during former President Donald Trump's administration. Read more.

In addition to assurances by Germany about its willingness to "reverse flow" gas to Ukraine if Russia ever cuts off supplies to Eastern Europe, the sources said the agreement would include a pledge by both countries to invest in Ukraine's energy transformation, energy efficiency and energy security. It was not immediately clear whether both countries would announce significant government investments, or whether they would seek to leverage private investments in Ukraine.

One way or another, the draft agreement between Germany and the United States on the Nord Stream-2 gas pipeline provides for a link between ensuring Ukraine's energy security with new sanctions against Russia that Germany can impose. Answering Interfax’s question about how acceptable the new threat of sanctions is and whether they can affect the implementation of the project, Russian Foreign Minister Sergei Lavrov said that any threat of sanctions cannot be acceptable, since they can only be imposed by the UN Security Council. ”Colleagues, primarily the United States and the European Union, which is actively adopting these "bad habits", get carried away by sanctions quite often. From the information leaked to the media, the surprising part (if it is true) is Germany’s readiness to prolong Russian gas transit through Ukraine after 2024. Let's see how this will be finalized. We were not surprised by the second part of these rumours (which, I repeat, we still have to see in the official execution) that if something happens if Russia "misbehaves" on Nord Stream-2, Germany and the European Union will "punish" the Russian Federation. If this is true, it is sad. But will see.”