Nord Stream 2 Gas Pipeline
|This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.|
Nord Stream 2 Gas Pipeline (Russian: Северный Поток - 2) is a natural gas pipeline currently under construction.
The pipeline would run from Ust-Luga, Russia to Greifswald, Germany. As mapped below, the route would also pass through the marine exclusive economic zones of Finland, Sweden, and Denmark.
- Operator: Nord Stream 2 AG
- Owner: Gazprom 50%, BASF/Wintershall 10%, Engie 10%, E.On 10%, OMV 10%; Shell 10%
- Capacity: 55 billion cubic meters per year
- Length: 764 miles / 1,230 kilometers
- Diameter: 45 inches / 1,153 mm
- Status: Construction
- Cost: €9.5 billion (US$11.6 billion)
- Financing: Engie, OMV, Shell, Uniper and Wintershall will each fund up to €950 million with the remaining project costs to be financed by Gazprom
- Start Year: 2022
In 2011, Nord Stream AG started evaluation of an expansion of the Nord Stream Gas Pipeline project which would include two additional lines (later named Nord Stream 2) to increase the overall annual capacity up to 110 billion cubic meters (3.9 trillion cubic feet). In August 2012, Nord Stream AG applied to the Finnish and Estonian governments for route studies in their underwater exclusive economic zones for the third and fourth lines. The idea of routing the additional pipelines to the United Kingdom was considered but abandoned. In January 2015, it was announced that the expansion project was put on hold since the existing lines were running at only half capacity due to EU restrictions on Gazprom.
In June 2015, an agreement to build two additional lines was signed between Gazprom, Royal Dutch Shell, E.ON, OMV, and Engie. As the creation of a joint venture was blocked by Poland, on 24 April 2017, Uniper, Wintershall, Engie, OMV and Royal Dutch Shell signed a financing agreement with Nord Stream 2 AG, a subsidiary of Gazprom responsible for the development of the Nord Stream 2 project. According to the agreement, each of five companies will provide €950 million, of which €285 million should be paid in 2017. The loan from the five companies will cover 50% of the project costs of €9.5 billion. The rest would be financed by Gazprom who remains the sole shareholder of Nord Stream 2 AG. Although the pipeline has received no formal approvals from Denmark, Sweden and Finland, it is scheduled to become operational in 2019–2020. In August 2019 the pipeline was reported to be 70% complete. According to the European Network of Transmission System Operators for Gas (ENTSOG), an industry group, in their Ten Year Network Development Plan released in November 2019, the total cost of the project is 8 billion Euros (9 billion USD). Nord Stream 2's ENTSOG TYNDP Project Code is TRA-F-937.
The route of additional lines would mainly follow the route of existing lines, except in the Russian onshore and offshore sections. In Russia, 866 km (538 mi) of new pipeline and three compressor stations would be built, and five existing compressor stations would be expanded for feeding Nord Stream 2. Nord Stream 2 will start at the Slavyanskaya compressor station near Ust-Luga port, located 2.8 km (1.7 mi) southeast of the village of Bolshoye Kuzyomkino (Narvusi) in the Kingiseppsky District of the Leningrad Oblast, in the historical Ingria close to the Estonian border. Its landfall would be at the Kurgalsky Peninsula on the shore of Narva Bay.
Following delays to the project's originally planned start date of mid-2020, in June 2020 Gazprom announced that the pipeline was on course to be commissioned by the end of 2020 or early 2021. The company was also seeking a permit from authorities in Denmark in order to use pipe-laying vessels with anchors to complete the pipeline in Danish waters. A decision from the Danish Energy Agency is expected in July 2020.
In July 2020, the Danish Energy Agency gave Nord Stream 2 permission to use pipe-laying vessels with anchors to complete the final 120 kilometre stretch of the gas pipeline in Danish waters.
In August 2020, Russian Foreign Minister Sergey Lavrov met with German Foreign Minister Heiko Maas. Speaking at a joint news conference after the talks, both sides confirmed they plan to finish the project, despite pressure from Washington to stop the project.
In September 2020, the co-chair of the German Green party, Katrin Göring-Eckardt, urged Chancellor Angela Merkel to end their country's involvement in the pipeline. This was a reiteration of the Green party's long held stance against the pipeline on the grounds that it runs "counter to the goals of the European Energy Union by increasing the EU’s energy dependency on Russia, giving it extra strategic leverage" according to IJGlobal. Citing the poisoning of Russian opposition leader Alexei Navalny as rationale, Göring-Eckardt stated "Nord Stream 2 is no longer something we can jointly pursue with Russia.”
Other German lawmakers, including Norbert Röttgen, a candidate for chancellor from Merkel's own CDU party, have also lobbied for the project to be abandoned in the aftermath of Navalny's poisoning. Merkel reportedly is in agreement with her foreign minister Heiko Maas who commented in early September 2020: "I hope the Russians don't force us to change our position on Nord Stream 2".
Amidst this renewed controversy, German Finance Minister Olaf Scholz reportedly attempted to bolster the pipeline's prospects by reaching out to United States Treasury Secretary Steven Mnuchin, offering to build two new LNG terminals to receive U.S. natural gas exports in exchange for the lifting of U.S. sanctions against Nord Stream 2.
According to the BBC, construction of the pipeline was 93% complete as of September 9th, 2020 but "for the first time since building began almost a decade ago, the future of the pipeline looks threatened."
As of September 2020, Russian officials estimate Nord Stream 2 to be completed in Q4 2020 or Q1 2021. However, that same month Bloomberg reported that "ambition now seems under threat." In mid-October 2020, and with approximately 150 kilometres of Nord Stream 2 remaining to be laid in Danish and German waters, Germany's foreign minister Heiko Maas told German media that he "assumes" the project will be completed although significant doubts remain as to when completion will be achieved. S&P Global reported that there are no indications of when final construction work will take place, noting that the pipe-laying vessel expected to carry out the work, the Akademik Cherskiy, was anchored in the Baltic Sea off the coast of Kaliningrad in October. Despite rising geopolitical tensions and speculation over the project in the second half of 2020, and calls for coordinated European action, the project has not been subject to any EU measures.
In late November 2020, Deutsche Welle reported construction of the "short stretch of the pipeline" remaining was set to resume in early December 2020. However, on December 8, 2020 Deutsche Umwelthilfe (DUH) reported that the vessel set to complete the construction was headed away from the site, despite never finishing the job. DUH interpreted this to mean that further construction of Nord Stream 2 is apparently canceled. On December 11, 2020, a Nord Stream 2 spokesperson confirmed to S&P Global that the pipe-laying vessel Fortuna was resuming work to lay a 2.6 kilometre section of the pipeline in the German Exclusive Economic Zone. This resumption of work in German waters less than 30 metres deep is the first construction development in almost a year since work was suspended due to the threat of US sanctions against pipe-layers. No information was forthcoming from the company on when and how the longer remaining section of pipeline will be laid in deeper Danish waters. In a December 24, 2020 speech, Gazprom Chairman Alexey Miller stated "we have resumed the construction of the Nord Stream 2 gas pipeline." Gazprom confirmed to Reuters on December 28, 2020 that it had completed the pipe-laying for the 2.6 kilometre section in German waters.
New U.S. sanctions on Nord Stream 2 passed into law on January 1, 2021 when the U.S. Congress passed the National Defense Authorization Act. These updated sanctions appear to be aimed at further hampering and delaying the project by widening the number of business entities which would face penalties should they assist the completion of Nord Stream 2 in Danish waters. According to Platts, the vessel Fortuna is expected to resume pipe-laying work on January 15, 2021, and the 150 kilometer Danish section could take three and a half months to complete followed by another month or two of testing. A Platts Analytics forecast estimates that the project could start operations in the third quarter of 2021, delayed by one quarter due to the latest sanctions. The Financial Times also reported that Gazprom will commence pipe laying in a section of the Baltic Sea administered by Denmark on January 15.
In mid-January 2021, the German Federal Maritime and Hydrographic Agency (BSH) issued a permit for the completion of the Nord Stream 2 gas pipeline in Germany's Economic Exclusive Economic Zone (EEZ). German media also noted that the completion could still be delayed by legal action from environmental groups as the remaining 30 km stretch of the pipeline runs through the edge of a conservation area for birds.
Bloomberg reported on January 25, 2021 that the pipelaying vessel Fortuna had started working at the Nord Stream 2 construction site in Danish waters, and that the work being done was being performed in line with relevant permits from Danish authorities and precedes the actual construction of the gas pipeline. In early March 2021, it was reported that a second Russian pipelaying vessel, the Adakemik Cherskiy was due to join the operation to lay the final pipeline section in Danish waters. The arrival of the Adakemik Cherskiy is expected to speed up completion of the project, though the timeline for completion remains unclear.
In May 2021, the new U.S. administration of President Joe Biden demonstrated that it was grappling to balance its approach to Nord Stream 2. The U.S. State Department has waives sanctions against Nord Stream 2 AG, the pipeline company entity, and its CEO Matthias Warnig, a former East German intelligence officer and close ally of Russian President Vladimir Putin. The Biden administration is instead expected to impose sanctions on several Russian ships involved in the pipeline construction. In a press statement, U.S. Secretary of State Antony Blinken commented: "Today’s actions demonstrate the Administration’s commitment to energy security in Europe, consistent with the President's pledge to rebuild relationships with our allies and partners in Europe. We will continue to oppose the completion of this project, which would weaken European energy security and that of Ukraine and Eastern flank NATO and EU countries. Our opposition to the Nord Stream 2 pipeline is unwavering."
In early June 2021, Russia's deputy prime minister Alexander Novak claimed that there were only 62 miles of the pipeline remaining to be built in the Baltic Sea. German environmental group Deutsche Umwelthilfe confirmed that it had applied for Nord Stream 2's construction and operating permit to be revoked on climate protection grounds, based on a new ruling by Germany's top constitutional court which has tightened the country's climate law. On June 4, Russian president Vladimir Putin announced that the first line of Nord Stream 2 had been completed and the second line would be finished within two months. Geopolitical manoeuvrings around the controversial pipeline are continuing, with the German and US governments seeking to formulate a joint stance by August ahead of German parliamentary elections on September 26. At stake, according to US Secretary of State Anthony Blinken, is agreement on measures to ensure that Nord Stream 2 is not used for "negative purposes, as a tool of coercion or blackmail, and that the interests of countries like Ukraine are protected, both economically and strategically". In a Frankfurter Allgemeine Zeitung article, Poland's foreign minister Zbigniew Rau criticised Germany's support of the pipeline, writing that the "completion of Nord Stream 2 will create a great security deficit on Nato's eastern flank and Ukraine will find itself in a security void".
In July 22, 2021, an agreement was reached between the U.S. President Joe Biden and German Chancellor Angela Merkel that will allow for the completion of the Nord Stream 2 pipeline. In response, Ukraine demanded formal talks with Brussels and Berlin on the pipeline, invoking a clause of its agreement with the EU on political association and economic integration. The Ukrainian-Polish statement says U.S. President Joe Biden's decision to stop opposing the pipeline "has created political, military and energy threat for Ukraine and Central Europe, while increasing Russia's potential to destabilize the security situation in Europe, perpetuating divisions among NATO and European Union member states."
In August 2021, the German courts rejected Nord Stream 2's application to be excluded from European rules requiring that pipeline operators be separate companies from those who supply the shipped gas, implying another setback.
On November 16, 2021, the Bundesnetzagentur, Germany's energy market regulator, temporarily suspended the procedure to certify Nord Stream 2 AG as an independent transmission operator, stating it "would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law." The suspension of the certification process led some analysts to speculate that the pipeline will not be able to begin commercial operations until mid-2022 at the earliest. On November 22, US Secretary of State Antony Blinken announced further US sanctions on the project under the Protecting Europe's Energy Security Act of 2019. Transadria Ltd. and its Marlin vessel became the latest entities connected to Nord Stream 2 to be sanctioned by the US.
On September 10, 2021, construction of the pipeline was completed in German waters, though a date for the pipeline becoming operational remained unclear.
Before Nord Stream 2 can start operating Nord Stream 2 AG, the operator of the pipeline, has to go through three key stages of regulatory approval. Germany's energy regulator Bundesnetzagentur must first make a draft judgment by January 8, 2022, on whether the company can be certified as an independent transmission system operator under German energy laws. From there, the European Commission will have two months to decide if the project complies with European unbundling rules that require pipeline owners to be different from suppliers of gas flowing in them to ensure fair competition. The final regulatory hurdle, which could extend into May 2020, requires an ultimate approval from Bundesnetzagentur.
Bundesnetzagentur suspended the procedure to certify Nord Stream 2 AG as an independent transmission operator on November 16, 2021.
On December 16, 2021, Bundesnetzagentur President Jochen Homann stated there would be no decisions in the first half of 2022 on Nord Stream 2's certification, effectively delaying the operational date until July 2022 onward.
European & American Opposition
The former president of the European Council Donald Tusk has said that Nord Stream 2 is not in the EU's interests. Former Italian Prime Minister Matteo Renzi and Hungarian Prime Minister Viktor Orbán have questioned the different treatment of the Nord Stream 2 and South Stream projects. The project is considered to violate the long-term declared strategy of the EU to diversify its gas supplies. A letter, signed by the leaders of nine EU countries, was sent to the European Commission in March 2016, warning that the Nord Stream 2 project contradicts European energy policy requirements that suppliers to the EU should not control the energy transmission assets, and that access to the energy infrastructure must be secured for non-consortium companies. A letter by American lawmakers John McCain and Marco Rubio to the EU also criticized the project in July 2016. Isabelle Kocher, chief executive officer of Engie, criticised American sanctions targeting the projects, and said they were an attempt to promote American gas in Europe. Although construction has started on Nord Stream 2, the government of Denmark wants to have its foreign ministry prevent it being routed through Danish waters, and a bill is proposed to go through Parliament in October 2017, giving the foreign ministry the authority to do so. Supporters of the pipeline, including Germany, believe that unlawful deference has been made to US wishes of the project not proceeding. In July 2019, citing opposition from the Danish government, Nord Stream 2's sponsors formally withdrew their application to build the pipeline through Danish territory.
In January 2018, former United States Secretary of State Rex Tillerson said that the U.S. and Poland "oppose" the Nord Stream 2 pipeline. They see it as undermining Europe's overall energy security and stability. On January 31, 2018, Germany granted Nord Stream 2 a permit for construction and operation in German waters and landfall areas near Lubmin. In March 2018 Nord Stream 2 AG received permits for construction and operation of the pipeline in the German Exclusive Economic Zone.
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Wikipedia also has an article on Nord Stream (Nord Stream). This article may use content from the Wikipedia article under the terms of the Creative Commons Attribution-ShareAlike 3.0 Unported License].