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What is Nord Stream 2 and how does it link to the Russia-Ukraine crisis?

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By Sebastian Zimmermann
Nord Stream 2 route
Nord Stream 2 route   -   Copyright  Credit: Euronews

Amid tensions between Russia and Ukraine, pressure is mounting on Germany to stop the Nord Stream 2 gas pipeline project.

It is just one of the economic sanctions that could be implemented in case Russia invades its neighbour.

In recent days, Berlin has made it clear that in the event of any aggression all options would be discussed, including the pipeline.

And after a long period of restraint, German Chancellor Olaf Scholz has followed this line and escalated his opinion. Like foreign minister Annalena Baerbock, he now threatens Russia with "high costs" if it invades Ukraine.

Support is also coming from the US, with Secretary of State Anthony Blinken saying "it's also worth mentioning that no gas is flowing through Nord Stream 2 yet, which means the pipeline is a means of pressure for Germany, the United States and our allies, not Russia."

What is Nord Stream 2?

Nord Stream 2 is the project meant to enable Germany to act more independently on the energy market in Europe.

Although the natural gas pipeline between Russia and Germany is officially completed, it is still not operational.

Nord Stream 2 runs parallel to the project Nord Stream 1, which has been in operation since 2011 at the bottom of the Baltic Sea. The pipeline stretches for roughly 1,230 km and connects Ust-Luga in Russia with Greifswald in north-eastern Germany.

The construction began in May 2018 and was completed on 10 September 2021, a year and a half behind schedule.

The owner of the pipeline is the Russian state-owned energy giant Gazprom, taking over half of the costs of the €9.5-billion project.

The remaining costs were financed by a European consortium of companies including OMV (Austria), Wintershall Dea (Germany), Engie (France), Uniper (Germany) and Shell (UK).

The pipes are supposed to deliver 55 billion cubic metres of gas each year -- but the project still needs certification from the German authorities before it can begin delivering gas.

Who supports the pipeline?

Clearly, Russia and Germany both support the project, but in Berlin, especially against the backdrop of the newly formed government consisting of three different parties, there have repeatedly been different views on whether and when Nord Stream 2 should be launched. The Greens, for example, reject the project for geostrategic and climate policy reasons. The liberal FDP sees a need for action.

In principle, Germany relies on Russian gas, considered to be a transition fuel in the green transition. The pipeline would be a relatively cheap way to obtain the raw material and cover the country's energy needs.

Moscow would benefit from this, as it could sell its gas, which would bring financial returns. About 55 billion cubic metres of gas are to be delivered from Russia to Germany through the Baltic Sea every year. According to the operating company, this could supply 26 million households.

The view from Brussels

Brussels does not support the pipeline. In a statement from June 2017, it says that Nord Stream 2 does not contribute to the goals of the Energy Union. The pipeline should "not be operated in a legal vacuum or exclusively under the law of a third country".

In the European Commission's view, the Nord Stream 2 project does not contribute to the Energy Union's objectives of opening up new supply sources, routes, and suppliers, it says.

"On the contrary, it could even facilitate a single supplier to further strengthen its position in the EU gas market and be accompanied by a further concentration of supply routes," the Commission stated in 2017.

There are currently well-functioning gas transport infrastructures that secure energy supply in Europe. However, existing transport routes -- especially via Ukraine -- could potentially be endangered by the construction of Nord Stream 2.

Josep Borrell, the EU's foreign affairs chief, said the pipeline was not a European project. It would be "solely in the hands of the Germans".

Geopolitically controversial

The EU is not the only party critical of the project.

The US also doesn't want the pipeline to become operational. In the context of sanctions imposed on Russia in 2020, construction was halted for almost a year.

And Washington fears Russia could use gas supplies as a political weapon.

In November 2018, the former US ambassador to the EU Gordon Sondland warned that "dependence on Russian gas for Europe is geopolitically wrong". The US does not want "gas to be turned off in the middle of winter when a political crisis erupts", Sondland stated at the time.

For this, the project is seen as competition. The US, for its part, would rather do business with Europe and sell liquefied gas, for example.

Kyiv concerned

There is also strong criticism of Nord Stream 2 from Poland, which feels that it is being ignored as a transit country for energy supplies.

The project could reduce the status of the pipelines that already exist on the land route, and important revenues generated by transit fees could thus be lost. In addition, there are fears that Russia could gain power by making Europe dependent on its gas.

There is also concern in Ukraine since the country is dependent on the billions of euros in revenue from transit fees.

Against the background of the Ukraine conflict, Kyiv is warning against putting the project into operation.

President Volodymyr Zelensky called it a "dangerous geopolitical weapon of the Kremlin." One week ago Ukraine's state energy company Naftogaz said that it was a matter of "national security" for Ukraine.

Considering the Russian troop build-up on the Ukrainian border, "it would be more difficult for Russian President Vladimir Putin to start a war if gas flowed through Ukraine, as gas supplies would then be affected," Naftogaz chief Yuri Vitrenko said. "I am sure: If Nord Stream 2 comes on stream, then no more Russian gas will be piped through Ukraine to Europe."