Russia’s Nord Stream 2 Pipeline

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The U.S. government is considering waiving sanctions on the company behind Russia’s Nord Stream 2 pipeline to Europe.

About

• The Biden administration still opposed the Nord Stream 2 pipeline but felt it was important to send a signal about its commitment to ties with Germany, which were badly damaged under former President Donald Trump.
• The waiver will give time for discussions with Germany on the potential negative effects of the pipeline and provide some leverage to deepen cooperation on broader issues, such as the pandemic, climate change, the economic recovery and dealing with China and Russia.

Nord Stream

• Nord Stream is an offshore natural gas pipeline from Vyborg in the Russian Federation to Greifswald in Germany that is owned and operated by Nord Stream AG, whose majority shareholder is the Russian state company Gazprom. 
• The project included two parallel lines and it was finished in late 2012. 

• At 1,224 kilometres in length, it is the longest subsea pipeline in the world, surpassing the Langeled pipeline.
• It has an annual capacity of 55 billion cubic metres (bcm).

Nord Stream 2

• At a length of 1,230 kilometres, it is to follow the route of the existing Nord Stream twin pipeline underneath the Baltic Sea. 
• It would transport natural gas from Russia directly to Germany (Russia’s Ust Luga to Greifswald in Germany).
• The pipeline system’s total capacity is set to double to 110 bcm following Nord Stream 2’s completion. 
• The pipeline crosses into the exclusive economic zones of five countries: Russia, Germany, Denmark, Finland, and Sweden.

(Image Courtesy: BBC)

Significance of the Pipeline

• More stable imports for Germany: Oil and gas imports in Germany are majorly done from other countries but this pipeline can definitely make the situation more stable as manufacturing is an important part of Germany’s economy.
• Sustainable Gas Supply to Europe: This pipeline would provide Europe with a sustainable gas supply. Russia will get more direct access to the European gas market.
• Investment and Employment: The proposed route for Nord Stream 2 uses the territorial waters and Exclusive Economic Zone (EEZ) of Finland, Sweden and Denmark which would benefit the national governments and local authorities through investments and employment generated due to it. 

Concerns

• Growing Presence of Russia: The pipeline will give better access to the Baltic Sea to Russia, thereby engaging in more military presence in that area.
• Capturing the US’s Market: There are considerable chances that the US will lose its market in the area due to Russia’s presence and its pipeline. The United States is an exporter of natural gas to Europe in the form of LNG, but Russian gas is cheaper.
• Threat to EU: European Union (EU)’s market is coming under threat due to this move.
• Loss to Ukraine: The project, now about 95% complete, would bypass Ukraine, depriving it of lucrative transit fees and potentially undermining its struggle against Russian aggression.

Conclusion

• The impending US sanctions waiver is a positive signal and constructive step as it provides space for diplomatic engagement with Germany to address the risks that a completed pipeline would weaken European energy security and that of Ukraine and Eastern flank NATO and EU countries.
• These actions demonstrate the US’s commitment to energy security in Europe, consistent with its pledge to rebuild relationships with its allies and partners in Europe.
• Although all countries may not always agree, the alliances should remain strong and the countries should commit to strengthen relationships to ensure national and energy security in Europe.

Source: TH