Russia has announced that it will complete the Nord Stream 2 pipeline project without the help of any foreign companies.
The project to run natural gas from Russia to Germany under the Baltic Sea was hit by US sanctions imposed on the construction companies involved last month.
Russia’s state-owned energy supplier Gazprom is working alongside five EU energy companies to pay for the 759 mile pipeline.
Gazprom says it will complete the Nord Stream 2 gas pipeline to Germany alone after European companies building the pipeline pulled out following U.S. sanctions. https://t.co/OnMocoaBOa
— Radio Free Europe/Radio Liberty (@RFERL) January 29, 2020
Critics said that Nord Stream 2 was being built to enable Russian gas to reach Europe without the need to go through Ukraine, who receive lucrative transit fees for heir troubles.
The new pipeline – originally planned to open in 2019 when Kiev and Moscow’s current transit agreement expired – would allow the Kremlin to reroute their gas under the Baltic Sea, depriving Kiev of billions of euros every year.
A new agreement was however signed between Kiev and Moscow in December. The five-year, $7 billion deal means that Ukraine is set to ship 65 billion cubic metres of gas every year.
The signing of the agreement avoids the crisis that engulfed Europe in the winter of 2009, when a dispute during negotiations saw Russia cut off supply, leaving European residents from Sofia to Milan feeling the effects.
The US meanwhile remains concerned that the new pipeline will increase Europe’s dependency on Russia for energy. In 2019, Russia supplied almost 37 percent of the gas market in Europe.
With Nord Steam 2 adding a further 55 billion cubic metres to capacity, Russia will be responsible for 120 billion cubic litres of European gas supply when the new pipeline opens.
Washington imposed cease-and-desist orders against the international contractors who were laying the pipeline as punishment against Moscow for alleged meddling in the 2016 US presidential elections.
Companies from Switzerland, Italy, Finland, Sweden and Denmark were supporting the construction of Nord Stream 2.
Allseas, the Swiss pipelayer and underwater construction experts immediately suspended operations. They were joined by Italian pipeline contractors Saipem.
Despite this setback, Gazprom’s deputy head Yelena Burmistrova told the European Gas Conference in Vienna on January 28th, “The Nord Stream 2 project, which is already 94 percent complete, will be finished by the Russian side.”
How Gazprom will complete the project remains less clear. The Financial Times reported that Gazprom was considering a range of options, which included rerouting their own vessels to the Baltic Sea and using Russian pipe laying contractors. No company has technology as advanced or modern as Allseas however.
Russian officials have said that they expect the pipeline to go online at some point between the end of 2020 and early 2021.
This isn’t the first delay to hit the Nord Stream 2 pipeline. Russia also had to wait to receive permission from Denmark to build in its waters, which was finally granted in October last year.