Pipeline dispute : Nord Stream 2 under threat
A letter sent by American senators to the German port of Sassnitz threatens the completion of Baltic pipeline
Prorer WiekA letter from three US senators threatens to escalate the dispute between the US and Germany over the near-complete Nord Stream 2 pipeline that would stream natural gas from Russia to Europe’s largest economy.
In a letter sent in early August, the senators threatened the operators of a Baltic Sea harbour that would service ships involved in the final construction: "The members of the board of directors, executives and shareholders of Fährhafen Sassnitz GmbH will be banned from entering the United States, and any property or ownership interests they have in our jurisdiction will be frozen."
The letter enraged the economy minister of the northern German state of Schleswig-Holstein because the US Embassy had not contacted the state government about the matter. He was "somewhat stunned by the senators' advance in the Sassnitz case," Bernd Buchholz told the Berliner Zeitung. "Anyone who thinks they have to react to the [German] government's energy policy in a protectionist manner or with other means of pressure or threats has simply not understood the rules of international free trade."
The state of Schleswig-Holstein plays a special role in this game of energy poker. While Nord Stream 2 already has a terminal awaiting connection on the east side of the state on the Baltic Sea, a terminal for liquefied natural gas (LNG) is to be built in Brunsbüttel near the North Sea on the western side. The Brunsbüttel terminal would accept LNG on ships from the US and was planned in part to appease the US government.
The firm German LNG, which is developing the LNG terminal, is finalising the documents for the planning approval process, Berliner Zeitung has learned. In addition, a review of the prospects for hydrogen, in a project to be operated jointly with German utility RWE, is underway. The cost of the project is about €500bln.
US efforts to derail Nord Stream 2
The Americans are doing all they can to halt Nord Stream 2 even though only the final connection to the German terminal remains incomplete. During talks, US officials told the pipeline's business partners that their existence would be threatened if they did not pull out of construction.
About 150km of pipes await laying in Sassnitz, Berliner Zeitung has learned. The pipes have already been jacketed with concrete to weigh them down on the seafloor and were delivered from the central German town of Mönchengladbach. The concrete came from German production, the additives from Sweden.
The pipes each weigh 24 tonnes, making transport by ship the easiest method to move them closer to pipelaying activities. A Nord Stream 2 insider says a flatbed truck can technically transport a single pipe but it’s a Herculean task.
Russian energy giant Gazprom has already anchored its Akademik Chersky pipelay ship at Sassnitz. The ship, together with the Russian vessel Fortuna, can complete the pipeline after earlier sanctions scared off the original pipelay contractors. Another residential ship is also moored at Sassnitz to provide living quarters for 140 workers, according to dpa.
Nord Stream 2 supervisory board chairman and former German chancellor Gerhard Schröder is keeping silent. Experts see this as a sign of nervousness about Nord Stream 2, because the Americans could actually stop the project in its final stages. Experts point out that any company that trade in dollars could be targeted by the US judiciary through their banks and insurance companies. Nobody wants to risk that.
A company spokesman for Nord Stream 2 told the Berliner Zeitung: "We are aware of the threatening letter from US senators. Nord Stream 2 has no comment on the contents."
Possible US sanctions would have far-reaching consequences for companies
Western European energy companies from Austria, Germany, France and the Netherlands have, according to the spokesperson, "each invested almost €1bln in the project, and more than 1,000 companies from 25 countries have fully committed themselves to ensuring that the project is completed."
The spokesman emphasises the far-reaching consequences: "US sanctions, if imposed, could directly affect over 120 companies from more than 12 European countries." The sanctions "would prevent investments of around €700mln to complete the pipeline – and this in difficult economic times".
In addition, "these sanctions would also undermine investments of around €12bln in the EU's energy infrastructure". These include "the approximately €8bln invested in Nord Stream 2, plus a further €3bln in investments by European companies in downstream infrastructure in Germany and €750mln for infrastructure in the Czech Republic".
This infrastructure was built "to transport the natural gas delivered through the Nord Stream 2 pipeline to the European market."
For Nord Stream 2, the US approach has several dimensions: "The escalating steps to prevent the laying of the remaining approximately 150km, or 6 per cent of the pipeline, show a clear disrespect for European consumers who would have to pay several billion more for natural gas if the pipeline isn’t completed. It also disrespects the EU’s right to determine its own future energy policy."