Navalny, EU, and the Future of Nord Stream 2

  • Nord Stream 2 has been on the news due to the Navalny poisoning.
  • EU wants sanctions for the Navalny poisoning.
  • Russia can bypass the project and focus on the liquefied natural gas.

Russian opposition leader Alexei Navalny was poisoned in August. As a result, the future of the Nord Stream 2 natural gas pipeline has been questioned. There is an attempt to simultaneously put pressure on Russia as part of the package of sanctions for the Navalny poisoning and not use these sanctions against Nord stream 2.

Nord Stream is a system of offshore natural gas pipelines from Russia to Germany. It includes two lines running from Vyborg to Greifswald forming original Nord Stream (Nord Stream 1), and two lines running from Ust-Luga to Greifswald termed Nord Stream 2.

Germany has a vested interest in Nord Stream 2. This is due largely to the interests of German companies. It is also a result of the internal German political struggle and the unfolding intrigue over who will succeed Angela Merkel as Chancellor.

It is obvious that Germany is interested in launching the gas pipeline so that German companies can get more gas at affordable prices. It should be noted that Poland not only takes the position of a critic of Nord Stream 2, but also brazenly presents itself as an alternative gas seller, intending to use its own gas liquefying capacities and ports with terminals for receiving liquefied gas.

Additionally, Germany can hardly be afraid that Russian gas will be used as a weapon. The possibility of supplying liquefied gas by sea from different suppliers (including the United States), and the possibility of pumping gas from France, for example, potentially eliminates Russian influence in this aspect. This is, of course limited to only the commercial interests.

However, the working group is of the opinion (with the understanding that “streams” are useful) that Nord Stream 2 is more important for Germany than for Russia. Nevertheless, Russia, as a gas seller, will be able to utilize it in another location.

What then are the Russian strategies in the unfolding multi-year struggle for the construction of Nord Stream projects? In fact, they are very specific, but sometimes quite effective. Now Russia is undertaking a more interesting strategy.

First, it takes an active position in the trade of liquefied natural gas supplied by water transport. The example of the port of Sabetta clearly shows this.

In January 2018, United States Secretary of State Rex Tillerson said that the U.S. and Poland oppose the Nord Stream 2 pipeline. They see it as undermining Europe’s overall energy security and stability.

Russia also intends to build a bridge between the gas transmission system and the “Power of Siberia.” This will allow a more rational approach to the issue of gas supplies and transfer gas to the West or East, depending on the current situation and political position.

In the future, the role and significance of these pipelines may fade, both for Russia and Europe. This may be due both to the commissioning of liquefied natural gas supply capacities and to the fact that the economic situation in the future does not portend great achievements.

It is very likely, for natural reasons, that the industry will need less gas than it does now. Russia is coming under harsh and not constructive pressure from Western partners, and is building backup options for “forcing gas.”

However, the construction of the Nord Stream 2 has not stopped. It has slowed down, for the time being.

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Christina Kitova

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

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