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Nord Stream 2 is again at the centre of political games

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The prospects for the imminent completion of Russia's Nord Stream 2 energy project continue to haunt politicians on both sides of the Atlantic. And although the tone of rhetoric against Russia has noticeably decreased in Washington, the Americans are actively using the topic of the gas pipeline in their political games, writes Alexi Ivanov, Moscow correspondent.

President Biden did not impose sanctions against Nord Stream AG (51% of the company belongs to GAZPROM) but strengthened sanctions against Russian pipe-laying companies. In Washington, they made it clear that they would no longer be able to stop the almost finished project. Nevertheless, Secretary of State Blinken continues to speak "about the danger" of the Russian gas pipeline for the energy security of Europe.

In turn, for Germany, Nord Stream 2 has long been a headache. The unprecedented pressure that Washington has exerted on Berlin in the last period is unlikely to have pleased Germany.

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However, in the end, the White House decided not to demonize Germany, but to achieve compromises for America that would allow Washington, if necessary, to control the transit of Russian gas, especially if it tries to significantly reduce the gas flow to Europe through Ukraine.

In Ukraine itself, the upcoming launch of Nord Stream 2 raises serious concerns, primarily due to potential losses for Kiev as a result of Moscow's reduction in gas pumping through the Ukrainian gas transportation system. Many experts in Ukraine seriously calculate possible losses.

The Russian Foreign Ministry has already reacted to such gloomy forecasts. First of all, the Ministry stated that Nord Stream 2 is a purely economic project that has no political dimension. Ukraine has a contract with Gazprom until 2024, and the issue of further gas transit will be resolved through negotiations. At the same time, Moscow is convinced that Ukraine will not remain without Russian gas. That was clearly stated by high ranking representatives of the Russian Foreign Ministry.

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Along with Ukraine, Poland actively expresses its dissatisfaction with the Nord Stream 2. Warsaw is known for its negative attitude to the Russian gas supplies to Europe. The country has already launched the construction of an alternative pipeline to Denmark, the Baltic Pipe, to deliver gas from Norway. However, experts doubt that the relatively modest reserves of Norwegian gas will be able to compete with natural fuel from Russia.

In any case, various political games and intrigues around the Nord Stream 2 are likely to last for a long time, largely due to pressure from Washington, the unwillingness of Germany and other EU countries to quarrel with America, as well as the desire to support Ukraine.

Energy

Ukraine says discussed guarantees with US and Germany over Nord Stream 2

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The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia, February 26, 2020.  REUTERS/Maxim Shemetov//File Photo

The energy ministers of Ukraine, the United States and Germany discussed guarantees for Ukraine about its future as a transit country after the construction of Russia's Nord Stream 2 gas pipeline, Ukraine's energy chief said on Monday (23 August), write Pavel Polityuk and Matthias Williams.

Kyiv fears Russia could use the pipeline, which will bring Russian gas to Germany under the Baltic Sea, to deprive Ukraine of lucrative transit fees. Several other nations also worry it will deepen Europe's dependence on Russian energy supplies.

The three ministers discussed "a number of steps that can be taken together in terms of real guarantees for Ukraine regarding the preservation of transit," Energy Minister Herman Halushchenko said.

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"We proceeded from the position that was declared and voiced by the president of Ukraine - that we cannot allow the Russian Federation to use gas as a weapon," he told reporters.

Ukraine is bitterly opposed to a deal between Washington and Berlin over Nord Stream 2, which will carry gas to Europe while bypassing Ukraine. U.S. President Joe Biden's administration has not tried to kill off the project with sanctions, as Ukraine lobbied for.

"From today's perspective we shouldn't reject any suggestions, but also not create any insurmountable obstacles," German Economy and Energy Minister Peter Altmaier told reporters.

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German Chancellor Angela Merkel met Zelenskiy in Kyiv on Sunday to offer reassurances Ukraine's interests would be protected, but Zelenskiy called for greater clarity on what steps would be taken. read more

Monday's meeting took place on the sidelines of the Crimea Platform, a summit in Kyiv designed to keep international attention focused on returning the Crimea peninsula, annexed by Russia in 2014, back to Ukraine.

"I will personally do everything possible to return Crimea, so that it becomes part of Europe together with Ukraine," Zelenskiy told delegates from 46 countries.

Addressing the summit after the gas talks, Altmaier accused Russia of repression in Crimea. "We will not allow Crimea to become a blind spot," he said.

U.S. Energy Secretary Jennifer Granholm said sanctions on Moscow would remain until Russia ceded back control of the peninsula, adding "Russia must be held accountable for its aggression".

Relations between Kyiv and Moscow collapsed after the annexation and the outbreak of war between Ukrainian troops and Russian-backed forces in eastern Ukraine that Kyiv says has killed 14,000 people in seven years.

Ukraine has accused Russia of trying to sabotage the summit by pressuring countries not to attend, while Russia has criticised the West for supporting the event.

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Energy

Nord Stream 2 goes to the finish line

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In recent months, the passions around the notorious Nord Stream 2 project have heated up to the limit. The Western press often expressed opposite points of view: from the need to ban the Russian gas project up to opinions that the gas pipeline is beneficial to Europe taking into account the growing demand for natural gas. Of course, there were also speculations about the importance and even the obligation to preserve the transit of Russian gas to Europe through Ukraine, as “the main condition” for the EU and the US agreeing to give a green light to the controversial project, writes Alexi Ivanov, Moscow correspondent.

In this regard, Washington and Berlin have been engaged in a tense dialogue over the past six months, looking for the best arguments for approving Nord Stream 2. Chancellor Merkel held rather tough and pragmatic talks with President Biden in Washington some time ago, which allowed the parties to find the best formula to justify their approaches to the project. As a result, Nord Stream 2 seems to have reached the finish line and will soon start functioning.

This is exactly the point of view that was recently voiced at the Russian Embassy in Berlin. The Russian ambassador to Germany, Sergey Nechaev, told the press that “only a few weeks remain " before the full completion of Nord Stream 2.

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As the diplomat noted, the work on the pipeline is at the final stage. "We proceed from the fact that the German-American agreement will not affect the pace of construction and the timing of completion of the Nord Stream 2," he said.

At the same time, Nechaev added that the agreement between Washington and Berlin does not carry any specific obligations for Russia.

Nord Stream 2 is a 99 percent completed pipeline from Russia to Germany with a total capacity of 55 billion cubic meters of gas per year. The construction has already reached the final stage and should be completed by the end of summer. In June, Nord Stream 2 AG, the operator of Nord Stream 2, announced that the construction of the offshore part of the first branch of the gas pipeline was technically completed, and commissioning work on filling the pipeline with gas will take several more months.

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Earlier, Berlin and Washington issued a joint statement noting that for the project to be implemented, it is necessary to ensure the continuation of transit through Ukraine after 2024. Germany also pledged to seek sanctions against Russia "if the Kremlin uses energy exports as a weapon".

Moscow has repeatedly urged to stop politicizing the situation, reminding that the gas pipeline is beneficial not only to Russia, but also to the European Union, and emphasizing that it has never used energy resources as an instrument of pressure.

President Vladimir Putin has more than once stressed that the Nord Stream 2 is “a purely economic project”, its route is both shorter than through European countries and Ukraine, and cheaper.

Of course, it is worth recognizing that the main dissatisfied party in this whole situation remains Ukraine, which still considers Nord Stream 2 a "threat" to its economic and partly political interests. Kiev is convinced that the West has made a deal with Russia to the detriment of Ukraine's strategic interests. It seems that President Zelensky is keen to raise this issue during his upcoming talks with President Biden in Washington at the end of August.

Nevertheless, Nord Stream 2 has almost become a reality, which will undoubtedly bring benefits to all parties involved in this large-scale project.

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Energy

US and Germany strike Nord Stream 2 pipeline deal to push back on Russian 'aggression'

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Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019. REUTERS/Anton Vaganov/File Photo

The United States and Germany have unveiled an agreement on the Nord Stream 2 gas pipeline under which Berlin pledged to respond to any attempt by Russia to use energy as a weapon against Ukraine and other Central and Eastern European countries, write Simon Lewis, Andrea Shalal, Andreas Rinke, Thomas Escritt, Pavel Polityuk, Arshad Mohammed, David Brunnstrom and Doyinsola Oladipo.

The pact aims to mitigate what critics see as the strategic dangers of the $11 billion pipeline, now 98% complete, being built under the Baltic Sea to carry gas from Russia's Arctic region to Germany.

U.S. officials have opposed the pipeline, which would allow Russia to export gas directly to Germany and potentially cut off other nations, but President Joe Biden's administration has chosen not to try to kill it with US sanctions.

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Instead, it has negotiated the pact with Germany that threatens to impose costs on Russia if it seeks to use the pipeline to harm Ukraine or other countries in the region.

But those measures appeared to have done little to calm fears in Ukraine, which said it was asking for talks with both the European Union and Germany over the pipeline. The agreement also faces political opposition in the United States and Germany.

A joint statement setting out the details of the deal said Washington and Berlin were "united in their determination to hold Russia to account for its aggression and malign activities by imposing costs via sanctions and other tools."

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If Russia attempts to "use energy as a weapon or commit further aggressive acts against Ukraine," Germany will take steps on its own and push for actions at the EU, including sanctions, "to limit Russian export capabilities to Europe in the energy sector," the statement said.

It did not detail specific Russian actions that would trigger such a move. "We elected not to provide Russia with a road map in terms of how they can evade that commitment to push back," a senior State Department official told reporters, speaking on condition of anonymity.

"We also will certainly look to hold any future German governments accountable for the commitments that they have made in this," the official said.

Under the agreement, Germany will "utilize all available leverage" to extend by 10 years the Russia-Ukraine gas transit agreement, a source of major revenues to Ukraine that expires in 2024.

Germany will also contribute at least $175 million to a new $1 billion "Green Fund for Ukraine" aimed at improving the country's energy independence.

Ukraine sent notes to Brussels and Berlin calling for consultations, Foreign Minister Dmytro Kuleba said in a tweet, adding the pipeline "threatens Ukraine's security." Read more.

Kuleba also issued a statement with Poland's foreign minister, Zbigniew Rau, pledging to work together to oppose Nord Stream 2.

Ukrainian President Volodymyr Zelenskiy said he was looking forward to a "frank and vibrant"discussion with Biden over the pipeline when the two meet in Washington next month. The visit was announced by the White House on Wednesday, but press secretary Jen Psaki said the timing of the announcement was not related to the pipeline agreement.

German Chancellor Angela Merkel spoke by phone with Russian President Vladimir Putin hours before the release of the agreement, the German government said, saying Nord Stream 2 and gas transit via Ukraine were among the topics.

The pipeline had been hanging over US-German relations since former President Donald Trump said it could turn Germany into a "hostage of Russia" and approved some sanctions.

German Foreign Minister Heiko Maas said on Twitter he was "relieved that we have found a constructive solution".

Russian Foreign Minister Sergei Lavrov, asked about the reported details of the agreement earlier on Wednesday, said any threat of sanctions against Russia was not "acceptable," according to the Interfax news agency.

Even before it was made public, leaked details of the agreement were drawing criticism from ome lawmakers in both Germany and the United States.

Republican Senator Ted Cruz, who has been holding up Biden's ambassadorial nominations over his concerns about Nord Stream 2, said the reported agreement would be "a generational geopolitical win for Putin and a catastrophe for the United States and our allies."

Cruz and some other lawmakers on both sides of the aisle are furious with the Democratic president for waiving congressionally mandated sanctions against the pipeline and are working on ways to force the administration's hand on sanctions, according to congressional aides.

Democratic Senator Jeanne Shaheen, who sits on the Senate Foreign Relations Committee, said she was not convinced the agreement would mitigate the impact of the pipeline, which she said "empowers the Kremlin to spread its malign influence throughout Eastern Europe."

"I’m skeptical that it will be sufficient when the key player at the table – Russia – refuses to play by the rules," Shaheen said.

In Germany, top members of the environmentalist Greens party called the reported agreement "a bitter setback for climate protection" that would benefit Putin and weaken Ukraine.

Biden administration officials insist the pipeline was so close to being finished when they took office in January that there was no way for them to prevent its completion.

"Certainly we think that there is more that the previous administration could have done," the US official said. "But, you know, we were making the best of a bad hand."

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