Russia to go it alone on construction of Nord Stream 2 pipeline

Russia to go it alone on construction of Nord Stream 2 pipeline

Russia has said it will complete construction of the controversial Nord Stream 2 gas pipeline under the Baltic Sea without the help of foreign companies, Financial Times writes in the article Russia to go it alone on construction of Nord Stream 2 pipeline. Tuesday’s admission by Gazprom, the Kremlin-controlled gas monopoly, is the first official acknowledgment that Moscow will complete the pipeline, which runs from Russia to Germany, without foreign involvement.

“The Nord Stream 2 project, which is already 94 per cent complete, will be finished by the Russian side,” Gazprom’s deputy head Elena Burmistrova said at the European Gas Conference Vienna.

Washington imposed sanctions last month against companies involved in the construction of the Nord Stream 2 as part of efforts to punish Moscow for alleged meddling in the 2016 US presidential elections. The Trump administration also voiced fears that the pipeline would increase Europe’s dependency on Russian energy.

Gazprom and five EU energy companies are paying for the Nord Stream 2, which was being laid by international contractors, who suspended their work on the project when the US sanctions were announced.

Critics say the pipeline is designed to reroute gas supplies to Europe that are currently sent through Ukraine, depriving Kyiv of lucrative transit revenues. Russia says it 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,” Ms Burmistrova said on Tuesday, pointing out the approaching 50th anniversary on February 1 of the “legendary” deal between Germany and the Soviet Union to supply gas in return for pipelines. 

It is unclear how Gazprom intends to finish the project without international assistance. Various options are being discussed, including vessels owned by the gas company and other Russian pipe laying contractors, but none are as modern or advanced as those used by Allseas.

Swiss group Allseas, the main contractor that had been laying the pipeline, immediately suspended operations in the face of US sanctions. Despite Ms Burmistrova’s comments, Nord Stream 2 AG, the fully Gazprom-owned pipeline operator based in Switzerland, on Tuesday insisted that together with the companies supporting the project — Engie, OMV, Royal Dutch Shell, Uniper and Wintershall, all of which have already given it substantial financial investment — it would work on finishing the pipeline.

The 55bn cubic-metre pipeline was initially expected to be launched by the end of 2019, when the previous gas transit contract with Ukraine was set to expire. Construction work stretched into 2020, however, after a delay in receiving permission from Denmark to build in its waters.

With a new Gazprom-Naftogaz transit contract now in place, Russian officials’ estimates for the completion of Nord Stream 2 now vary from the end of 2020 to early 2021.