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Nord Stream 2 pipeline: anatomy of an uneasy compromise

·4-min read

The Nord Stream 2 pipeline, set to double natural gas supplies from Russia to Germany, was completed on Friday after more than three years of construction mired in political controversy.

Here is a look at the history of the energy project, which critics say will increase Europe's dependence on Russian gas and Ukraine has described as a "geopolitical weapon".

- What is it? -

Running from Russia's Baltic coast to northeastern Germany, the underwater, 1,200-kilometre (745-mile) long Nord Stream 2 follows the same route as Nord Stream 1, which was completed over a decade ago.

Like its twin, Nord Stream 2 will be able to pipe 55 billion cubic metres of gas per year to Europe, increasing the continent's access to relatively cheap natural gas at a time of falling domestic production.

Russian giant Gazprom has a majority stake in the 10-billion-euro ($12 billion) project. Germany's Uniper and Wintershall, France's Engie, the Anglo-Dutch firm Shell and Austria's OMV are also involved.

Ahead of the completion, Gazprom's boss Alexei Miller had said that the first gas deliveries could begin as soon as in October.

- Why is it controversial? -

Nord Stream 2 bypasses Ukraine's pipeline infrastructure, depriving the country of around a billion euros annually in transit fees and, Kiev fears, removing a key check on potential Russian aggression.

Ukraine, in conflict with Russia since Moscow's 2014 annexation of Crimea, also believes Nord Stream 2 will be used by Russia to exert political pressure.

In past disputes with Russia, Ukraine has had its gas supply cut off several times.

The US shares those concerns. As do several European nations, particularly Poland and eastern European countries wary of becoming too reliant on Moscow for energy security.

Analysts meanwhile disagree about Nord Stream's economic and environmental benefits.

A 2018 report by German think-tank DIW said the project was unnecessary and based on forecasts that "significantly overestimate natural gas demand in Germany and Europe".

- Why is Germany so keen? -

Russia and Germany insist Nord Stream 2 is a commercial project.

Europe's top economy imports around 40 percent of its gas from Russia, and believes the pipeline has a role to play in Germany's transition away from coal and nuclear energy.

Former chancellor Gerhard Schroeder serves as chairman of the Nord Stream's shareholders committee.

A major test came at the start of the year when Chancellor Angela Merkel resisted strong pressure from Washington and Brussels to abandon the pipeline following the jailing of Kremlin critic Alexei Navalny.

- US U-turn? -

Like predecessors Barack Obama and Donald Trump, US President Joe Biden objects to Nord Stream 2, calling it a bad deal for Europe and a security risk.

But critics like to point out that the US also wants to boost sales of liquefied natural gas (LNG) to Europe.

US sanctions on Russian vessels laying the pipeline had long succeeded in delaying Nord Stream 2, angering Germany.

But Biden, eager to rebuild transatlantic ties after Trump, in May unexpectedly waived sanctions on the Russian-controlled company behind the project.

Then, in July, Germany struck a deal with the US to allow the completion of the pipeline, promising to respond to Russia if Ukraine's fears materialise.

Germany also said it would use its leverage to persuade Russia to extend a gas transit agreement through Ukraine that is set to expire at the end of 2024, and boost investment in green energy projects in Ukraine.

- What's next for Ukraine? -

Ukrainian President Volodymyr Zelensky continues to insist that Nord Stream 2 poses a serious global security threat.

"We view this project exclusively through the prism of security and consider it a dangerous geopolitical weapon of the Kremlin," he said during a meeting with Merkel in Kiev in August.

Zelensky's spokesman said Friday that Kiev will "fight this political project, before and after its completion and even after the gas is turned on."

Reaffirming support for Ukraine, Biden hosted Zelensky at the White House in early September.

After the meeting Zelensky told reporters Biden had assured him the United States would impose sanctions on the pipeline if there were "violations" from Russia that would create problems for Ukraine's energy security.

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