Nord Stream 2 may be ‘dead’ after Putin’s push into Ukraine

Pressure is mounting on Germany and the EU to terminate the Nord Stream 2 gas pipeline project definitively, after Russia on Monday night (21 February) ordered troops into two breakaway regions in eastern Ukraine.

For now, the certification of the controversial export gas pipeline from Russia to Germany has been scrapped amid the scramble by the EU plus Western allies to impose an initial set of sanctions against Russian officials.

German chancellor Olaf Scholz told a news conference on Tuesday that “under the present circumstances, certification is not possible.”

The construction of the 1,234km pipeline from St Petersburg, under the Baltic Sea to Germany, was completed last year — but has not begun operating yet.

Matti Maasikas, the EU ambassador to Ukraine, broke diplomatic niceties on Tuesday to share his views on Twitter.

Maasikas wrote that Nord Stream 2, more than anything, had already damaged relations between Ukraine and the EU, and had even affected his swearing-in ceremony, which is ordinarily a formality.

“I will not miss you, pipeline,” he wrote.

The certification process already has dragged on for months, amid long-running concerns about deepening Europe’s reliance on Russian gas imports and about further diminishing Russia’s need to transship gas through Ukraine.

“Effectively, the pipeline is dead,” said Piotr Buras, the Warsaw head of the European Council on Foreign Relations.

Indeed, putting Nord Stream 2 into the deep freeze is one of the strongest signals Europe can send Moscow, and Buras said the message would have been even more powerful if it had been delivered by the entire EU, as part of the sanctions package, rather than by Germany alone.

“Now Berlin takes the whole responsibility,” Buras said.

But as long as Russia remains in eastern Ukraine, the pretence that the pipeline does not pose a threat to energy security is “no longer valid,” said Buras, adding that the pipeline approval process may never restart at all.

Au Revoir, not goodbye?

Some energy experts took a different view, saying the certification procedure could easily be renewed if a diplomatic solution were found.

“Germany is buying time here, and getting an important bargaining chip for eventual negotiations” with Moscow, wrote Simone Tagliapietra of think-tank Bruegel on Twitter.

But the emerging consensus was that the pipeline could lay unused — perhaps forever.

Stefan Meister, an expert on Russia and Ukraine at the German Council on Foreign Relations, said Putin’s decision to recognise breakaway republics in Ukraine had undermined German-Russian relations “in a fundamental way”.

“Nord Stream 2 is history,” he said.

Meister also said Russia was unlikely to block gas supplies to Europe in response to halting the approval of Nord Stream 2.

But Dmitry Medvedev, a former president of Russia and now deputy chair of Russia’s Security Council, warned that Berlin’s decision would hit European wallets.

“Welcome to the brave new world where Europeans are very soon going to pay €2,000 for 1,000 cubic metres of natural gas!,” Medvedev crowed on Twitter.

Currently imports from Russia account for some 40 percent of EU gas demand — up from around 27 percent in 2013.

The growing dependence on Russian gas, Meister said, is a “big political failure” that laid bare European naivete about its security and geopolitical strategy.

‘The safe side’

Then there are the long-simmering environmental concerns about Nord Stream 2.

The EU’s reliance on Russian gas has repeatedly been slammed by green groups and environmentalists who deplore the bloc’s long-standing investment in fossil-fuel projects like gas pipelines rather than renewable sources.

“Domestic renewables ensure security of supply and climate protection, leading to independent political decisions in times of geopolitical crisis,” said Hans-Josef Fell, president of Energy Watch Group.

Nord Stream 2 AG, a Switzerland-based company owned by Russian energy firm Gazprom which operates the gas pipeline project, declined to comment on potential sanctions. And, on Tuesday, the Kremlin said it intends to continue uninterrupted supplies of gas and liquified natural gas to Europe.

But Ukraine’s Naftogaz CEO Yuriy Vitrenko, who lobbied hard for sanctioning the Nord Stream 2 pipeline, welcomed the decision to suspend the certification process of the pipeline.

“This demonstrates that Germany stands in solidarity with Ukraine,” Vitrenko said in a statement. “Putin’s revisionist imperial policy poses a threat to Ukraine, Europe and the whole world,” he added.

European Commission president Ursula von der Leyen struck a reassuring note on Tuesday, saying that the 27-nation bloc would remain on “the safe side” for the remainder of this winter in terms of its energy supplies.

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