Russian Prime Minister Dmitry Medvedev has said the Nord Stream 2 gas pipeline would be completed in months despite last week’s US sanctions.
The sanctions are yet to be imposed on the pipeline, which is due to supply Russian gas to Germany.
He said the new gas transit agreement with Ukraine would also reduce the impact on Russian gas supplies of the sanctions introduced on the construction of the Gazprom pipeline.
Donald Trump on Friday signed off the sanctions against firms and individuals involved in Nord Stream 2.
The measures will block US visas and freeze US-based assets.
“Allowing Nord Stream 2 to be built now will simply increase European dependency on Russia,” said Richard Grenell, the hawkish US ambassador to Germany and a Trump ally.
Allseas, the Swiss-based pipe-laying firm, immediately said it was abandoning the Vyborg to Lubmin pipeline project.
Around 160km of Nord Stream 2 remains to be completed, according to the construction consortium.
Russia accuses the US of using sanctions as an economic weapon to boost the sale of more expensive US LNG (liquefied natural gas) to Europe.
Trump has repeatedly called on Germany to import US LNG, produced from the environmentally ruinous process of fracking, but US gas is 20 per cent more costly than Russian gas, according to Berlin.
“Of course we will finish building… Gazprom has alternative options for how to lay it. It will take a little more time but that’s no big deal,” Medvedev told the media.
“There’s nothing catastrophic about [Washington’s sanctions], especially considering the fact that we have already reached an agreement with the Ukrainians about transit,” the former president said.
Over the weekend, Russia and Ukraine signed a new five-year transit deal to replace the existing agreement that expires this month.
The current pipeline through Ukraine provides the war-torn country with an annual income worth 2 per cent of its GDP.
Of the new agreement, Medvedev said: “It’s a very humane tariff, I would say.”
EU retaliation?
Claudia Kemfert, an economist at the German Institute for Economic Research (DIW) think tank, said climate tariffs should be imposed on the US to prevent gas extracted through fracking reaching the EU.
The environmental economist told Germany’s Handelsblatt said Washington’s Nord Stream 2 sanctions were an “aggressive instrument of a fossil energy crisis” to sell US gas in the form of LNG, natural gas super-chilled to be transported in liquid form.
While conceding that the pipeline was “environmentally harmful, economically unnecessary, and financially unprofitable”, Kermfert said the US sanctions were also unacceptable.
The 1,200-km, US$11.7-billion pipeline is due to be completed next year, following the route of the existing Nord Stream 1, doubling the annual capacity to 110 billion cubic metres. Germany says it will fill a gap left by the phasing out of its nuclear power stations, and the projected fall in supply from Norway and the Netherlands, as their reserves are depleted.
Germany’s US policy coordinator Peter Beyer said counter-tariffs were not being considered in Berlin.
Picture credit: YouTube
