Nord Stream 2 pipelaying set to restart. U.S. warns of new sanctions

As Gazprom prepares to continue Nord Stream 2 pipelaying work in Danish waters, the U.S. State Department has again warned European companies of sanctions if they are suspected of helping to build Russia’s new gas pipeline.

Nord Stream 2 has previously sent a notice to the Danish Energy Agency that it would resume pipelaying work along two unfinished parallel segments of the pipeline in Danish waters from 15 January. The two unfinished segments extend for about 49 kilometres and 68 kilometres.

They run from the maritime border between Denmark and Germany to the south-east of Bornholm Island, where Allseas halted its pipelaying work in December 2019 on the eve of the introduction of U.S. sanctions against Nord Stream 2.

The Financial Times reported last week that the work would be done using the Fortuna pipelayer and two support vessels, capable of laying about one kilometre of pipe a day. At that rate, the vessel could finish operations in about four months, dependent on weather conditions.

The vessel poised to continue work on the pipeline as it is currently moored in the Baltic Sea, very close to the Danish coastline.

Also, an undisclosed U.S. government source told Reuters that companies aiding the continuation of pipelaying operations would face the risk of sanctions as the outgoing Trump administration prepares a final round of punitive measures against the project.

According to the source, the State Department is expected to issue a report by Thursday or Friday on companies it believes are helping the Russia-to-Germany pipeline. Companies that could be in the report include ones providing insurance, helping to lay the undersea pipeline or verify the project’s construction equipment.

It is still unclear whether the latest political developments in the United States regarding Trump’s impeachment for inciting last week’s riot at the U.S. Capitol will have any effect on the decisions regarding sanctions towards NordStream 2.

U.S. President-elect Joe Biden has opposed the project when he was vice-president under Barack Obama but it remains to be seen if his stance remains the same after taking office on 20 January.

With all of this in mind, it is worth noting that Russia’s Foreign Ministry still claimed that Nord Stream 2 would be completed despite pressure from the United States.

The construction of the $11 billion Nord Stream 2 project is nearly finished. The section in Danish waters is the only part that requires completion as the part off the coast of Germany was completed in late December. The project is designed as two parallel 48-inch lines, roughly 1,200 kilometres long, each starting southwest of St. Petersburg and ending at German coast, Greifswald.

It is designed to boost the amount of Russian gas that can be shipped to Europe without having to go through Ukraine. The gas pipelines will have the capacity to transport 55 billion cubic meters (bcm) of Russian gas a year to the EU, for at least 50 years.

The Nord Stream 2 pipeline will pump gas directly from Russia to western Europe, bypassing Ukraine and, according to the U.S., will rob it of lucrative transit fees as well as increase Russia’s economic and political leverage over Europe.

On the other hand, Russia – as well as Germany – claim that Nord Stream 2 is nothing but a commercial project. Germany also needs gas to enable shutting down coal and nuclear plants due to environmental and safety concerns.