Facing Putin, Germany suspends Nord Stream 2 pipeline that would bring Russian gas to Europe

Germany decided to suspend the Nord Stream II gas pipeline after the recognition by the Russian government of Vladimir Putin of the pro-Russian separatist territories in Ukraine.

The German head of government, Olaf Scholz, announced the suspension of the certification of the gas pipeline, essential for its start-up.

The project will be submitted to are-evaluation” policy by the Ministry of Economy due to the new “geopolitical situation”.

The gas pipeline was not in operation due to a legal blockade by the German energy regulator because it still does not comply with European and German legislation on industry.

But the decision announced Tuesday goes further. The German government thus decided to withdraw an opinion “politician” favorable according to which the project did not pose any risk to the “security” national. An opinion that will now be reviewed.

The German announcement provoked a derisive reaction from former Russian President Dmitry Medvedev: “Welcome to a new world, in which Europeans will soon pay 2,000 euros for 1,000 cubic meters of gas”, a huge sum for Germany, which in 2020 alone imported 56.3 billion cubic meters of Russian gas, i.e. 55% of its gas needs.

The White House, through its spokesperson Jenber Psaki, “celebrated” the suspension of the Nord Stream 2.

“serious mistake”

Nord Stream 2 is definitely a cursed project, one that has been in the midst of geopolitical and economic battles since its inception.

For several years, the project has pitted the United States against Germany, the main promoter of the project, but also the Europeans against each other, as well as Russia and Ukraine.

Nord Stream 2 links Russia with Germany through a 1,230-kilometre tube under the Baltic Sea with a capacity of 55 billion m3 of gas per year, on the same route as its twin, Nord Stream 1, which operates from the 2012.

By bypassing Ukraine, the route is supposed to increase the chances of supplying Russian gas to Europe at a time when European Union (EU) production is declining.

Promoted by the Russian giant Gazprom, the project, estimated at more than 10,000 million euros (US $ 11,345 million) was co-financed by five European energy groups (OMV, Engie, Wintershall Dea, Uniper and Shell).

Germany is the main promoter of the gas pipeline in the EU, which it believes will help it achieve the energy transition to which it has committed. At the same time, it will turn its territory into a European gas hub.

But there were many opponents to the project. Ukraine, in particular, fears losing the revenue it earns from transiting Russian gas and becoming more vulnerable to Moscow. President Vlodimir Zelensky on Tuesday reiterated his call for the “immediate” halt of the project. The head of his diplomacy welcomed the suspension as “politically and morally justified.”

The United States, for its part, was opposed from the start against a project that could weaken Ukraine economically and strategically, increase the EU’s dependence on Russian gas and deter Europeans from buying American shale gas.

unexpected twist

Several companies have pulled out of the project due to threats of US sanctions, including insurers.

Democratic US President Joe Biden began his term in office on an extremely hostile line to Nord Stream 2, in line with his predecessors.

But, unexpectedly, the US administration announced in May 2021 that it would not sanction Nord Stream 2 AG, the company in charge of operating the gas pipeline, thus removing an essential obstacle to its implementation.

After several weeks of negotiations, the United States, in order not to harm its German ally, announced an agreement with the German government in mid-2021 to end their dispute.

Europeans are divided, with Poland and the Baltic states concerned that the EU is bowing to Russian ambitions.