Back in November 2011, Russian President Dmitry Medvedev and one of the European leaders Angela Merkel met in the German resort of Lubmin to discuss the construction of the Nord Stream gas pipeline.
After a while, the deal was set and later it was decided that the Nord Stream 2 – the expansion of the existing gas pipeline – will take place shortly. The project seemed to be a win-win for all: Russia would get direct access to the EU region and the countries of the EU would get natural gas from the world’s largest reserves of Russia at a reasonable price.
However, the only party that is not in favor of the project’s success is the United States – due to its fear of Russia’s growing influence in Europe. Hence, Trump’s administration hurried to notify everyone that Russia already accounts for 40% of the EU’s gas supplies. Therefore, if the Nord Stream 2 is launched as planned, the US will lose its share on the market. To avoid that, Donald Trump imposed sanctions on the international firms that were part of the project – in order to slow down the project’s implementation. Namely, Allseas, which was due to lay 96% of all pipes, was forced to halt its work.
Facing severe difficulties both internationally and domestically, Russia’s Gazprom stated it will finish the works on its own without any help from foreign companies. As Gazprom deputy head Yelena Burmistrova commented, “The Nord Stream 2 project, which is already 94% complete, will be finished by the Russian side.”
Because of the sanctions imposed on foreign companies that were involved in the project, the deadline was extended from the end of 2020 to early 2021. Yet it is still unclear how Gazprom will finish the works on its own – without international assistance, but on time.
Still, the Nord Stream 2 project is of an utmost importance for Russia as it will allow the country to not rely on Ukraine for transiting gas to Europe. However, in late December 2019 the sides made a $7 bln worth agreement regarding the gas transmission.
Under the new agreement, Kiev will ship in 2020 a minimum of 65 bln cubic meters, or about 22 bcm less than it did in 2018. Minimum volumes are expected to decrease further over the span of 2021-2024.
By Natalia Revishvili, ForexNewsNow.com