Germany — The Cost of the Nord Steam 2 Pipeline

  • The pipeline is at the 95% completion.
  • The former US president issued sanctions pertaining the pipeline.
  • Germany does not have natural gas reserves.

The Nord Stream 2 pipeline is almost complete. According to the German Minister of the Environment and Nuclear Safety of Svenja Schulze the project construction was started by adhering to all the laws and regulations. The discussion pertaining the Nord Stream 2 took place during the interview  on the January 24, 2020.

Svenja Schulze is a German politician of the Social Democratic Party from Münster in Westphalia. Schulze currently serves as Minister of the Environment, Nature Conservation and Nuclear Safety in the fourth coalition government of Chancellor Angela Merkel.

The interview was published in the  Redaktionsnetzwerk Deutschland. The RedaktionsNetzwerk Deutschland is the Hanover-based joint corporate newsroom of German Madsack Media Group. The biggest limited partner of Madsack is the Deutsche Druck- und Verlagsgesellschaft, which is fully owned by the Social Democratic Party of Germany.

Furthermore, the Minister of the Environment and Nuclear Safety Svenja Schulze said  “If we had stopped the project now, we would have caused enough damage, calling into question the reliability of decisions made on the basis of the principles of the rule of law, and probably would have to face the legal proceedings”

Germany is committed to abandon the coal and the nuclear power dependency. Therefore, Germany is dependent on the natural gas during the transition period – before it can fully ensure the supply of energy resources from the renewable sources.

In addition, Germany does not have natural gas reserves and requires the gas to be imported. It is highly unlikely, the German populous would agree to give up the Russian gas imports in favor of the solidarity with the Alexei Navalny, who chose to return to Russia.

The US sanctions by the former US president Donald Trump focus on the turmoil for Germany. President Trump pointed out that the US is paying for German military protection while Germans are buying fuel from Russia. “Germany pays Russia billions of dollars a year for Energy, and we are supposed to protect Germany from Russia. What’s that all about?”  Trump tweeted, shortly after Defense Secretary Mark Esper said the US would move out some 11,900 US soldiers from Germany…

Thus far, over 2.3 thousand km (1429.154 miles) of the pipes have been laid. Hence, close to the 95% of the Nord Stream 2 pipeline has been completed. The pipeline is at the final phase of completion.

Moreover, on the January 19, the president of Russia Vladimir Putin  held an online meeting with the Chairman of the Management Board of the Gazprom Alexey Miller pertaining the Nord Stream 2 pipeline. The meeting included the discussion of the political risk for Russia.

The risks are associated from the US, since the inauguration of the 46th president of the United States Joe Biden on the January 20th. There are also minor risks associated with the limitrophe states : Ukraine, Poland, Slovakia, Lithuania and Estonia.

The president of Russia Vladimir Putin.

PJSC Gazprom is a Russian partially state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. As of 2019, with sales over $120 billion, it sits as the largest publicly-listed natural gas company in the world and the largest company in Russia by revenue.

Recently, Gazprom issued the Eurobonds for the Nord Stream 2.   The Russian corporation has successfully placed a record $2 billion Eurobond with a yield of 2.95% for a period of eight years. The placement was done on the Irish Euronext Dublin Exchange.  Gazprom is profitable, especially with the sharp increase of the gas prices, which includes both natural and liquified forms.

Overall, without the Russian gas, German transition will become impossible. As a result, it would hurt the environment and the German economy. Hence, being in such situation to aid the agitator aka Alexey Navalny and Ukraine does not seem to be wise from the German national interests.

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Christina Kitova

I spent most of my professional life in finance, insurance risk management litigation.

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