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Tuesday, May 21, 2024

Germany & EU react strongly to US sanctions on Russian gas pipeline

EU nations -especially its economic power house Germany - is hugely dependent upon Russian gas for its industry. American actions clearly aimed at restricting a trade relationship between Russia and Germany will increase tensions between the NATO allies. Turkey is already estranged with Washington on its relations with Putin's Russia.

Germany accused the US of interfering in its internal affairs on Saturday, in an increasingly angry spat over Washington’s decision to impose sanctions on companies involved with a major project to supply Western Europe with Russian gas.

Moscow and the European Union also issued statements criticizing the sanctions, a day after President Donald Trump signed off on asset freezes and visa restrictions on those involved in the Nord Stream 2 project.

US lawmakers are seeking to stymie what they regard as an increasing reliance on Russian energy in Western Europe by targeting the project, which aims to double deliveries of Russian natural gas to Germany via a pipeline under the Baltic Sea.

More than 80 percent of the undersea pipeline has been completed for the project — half-financed by Russia’s state-owned Gazprom, with the other half paid for by five European companies

Sanctions target Nord Stream System of Pipelines

The sanctions target contractors working to lay pipes for Nord Stream 2 — a 10-billion-euro ($11-billion) project expected to be completed in early 2020 — and another Russian gas project, TurkStream.

Nord Stream (former names: North Transgas and North European Gas Pipeline) is a system of offshore natural gas pipelines from Russia to Germany. It includes two lines running from Vyborg to Greifswald forming original Nord Stream (Nord Stream 1), and two lines running from Ust-Luga to Greifswald termed Nord Stream 2.

Nord Stream is owned and operated by Nord Stream AG, whose majority shareholder is the Russian state company Gazprom, and Nord Stream 2 is owned and will be operated by Nord Stream 2 AG, a wholly owned subsidiary of Gazprom.

The first line of Nord Stream was laid by May 2011 and was inaugurated on 8 November 2011. The second line of Nord Stream was laid in 2011–2012 and was inaugurated on 8 October 2012. At 1,222 kilometres (759 mi) in length, Nord Stream is the longest sub-sea pipeline in the world, surpassing the Langeled pipeline.

Nord Stream 2 was laid in 2018–2020 and is expected to become operational in 2020. Nord Stream and Nord Stream 2 both have a total annual capacity of 55 billion cubic metres (1.9 trillion cubic feet).

Both projects have always been opposed by the United States as well as several Central and Eastern European countries because of concerns that it would increase Russia’s influence in the region. In recent years this criticism had increased.

In the first sign that the sanctions were beginning to bite, Swiss contractor Allseas suspended its Nord Stream 2 activities while it awaited clarification from the US authorities on the detail of the measures.

Why punish NATO Allies?
Although US Congress overwhelmingly backed the sanctions, there was some criticism among lawmakers of a move that in effect punishes NATO allies such as Germany.

While an EU spokesman criticised “the imposition of sanctions against EU companies conducting legitimate business”, the German government said Berlin rejected “these sorts of extra-territorial sanctions”.

“They will hit German and European companies and constitute an interference in our internal affairs,” said Chancellor Angela Merkel’s spokeswoman Ulrike Demmer.

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Russian Foreign Ministry spokeswoman Maria Zakharova accused the United States of pushing an ideology that hindered global trade, adding on her Facebook page: “Soon they will demand that we stop breathing.”

But the United States is not the only nation to question the project — Ukraine, Poland and some of the Baltic nations have also expressed doubts.

Ukraine had worried that the new pipeline would cut it out of the gas supply business and allow Russia to ratchet up pressure over other issues.

US lawmakers had cited support of Kiev as part of their justification for imposing sanctions. Independent analysts however see Ukraine, Poland and smaller Baltic states as the US satellites dependent upon the US support to counter Russian influence and thus willing to take any position that satisfies the US.

Read more: Continued Russian gas transit through Ukraine: European Union’s top priority

But Demmer said this rationale was “particularly incomprehensible” because Moscow and Kiev reached an agreement in principle last week that will regulate the transit of Russian gas to Ukraine from 2020.

More than 80 percent of the undersea pipeline has been completed for the project — half-financed by Russia’s state-owned Gazprom, with the other half paid for by five European companies.

Gazprom is the major share holder in The Nord Stream System. US sanctions will lead to more tensions between Germany and its EU partners and the US. Germany is hard pressed for energy sources and sees this as direct US intervention in its economic decision making.

GVS News Desk with input from Agencies