What Is Nord Stream 2? Russia-Europe Gas Pipeline Via Germany That US Says Helped Cripple Ukraine

Germany halted the Nord Stream 2 natural gas pipeline project Wednesday after Russia recognised two separatist-held breakaway regions in eastern Ukraine — Donetsk and Luhansk.

View of pipe systems and shut-off devices at the gas receiving station of the Nord Stream Baltic Sea pipeline, through which Russian natural gas has been flowing to Germany since 2011 | Photo: Getty

New Delhi: Hours before Russia invaded Ukraine early Thursday, bringing Europe to the brink of a war, German Chancellor Olaf Scholz Wednesday suspended the certification process for the Nord Stream 2 natural gas pipeline project.

The undersea pipeline that directly links Russian gas to Europe via Germany is a Kremlin project that the United States says helped cripple Ukraine. 

World on the pipeline is complete but it is not operating yet. In 2019, according to a Reuters report, Washington imposed sanctions on some companies and individuals involved in the project, saying it was a tool for Russia to support aggression against Ukraine.

Germany and Russia, however, had been insisting that the project was purely commercial.

Governments in the West are now trying to exert leverage on Russia to deter further military moves against Ukraine.

Germany halted the project Wednesday after Russia recognised two separatist-held breakaway regions in eastern Ukraine — Donetsk and Luhansk.

What Is Nord Stream 2? 

Nord Stream 2 is a 1,230-kilometre natural gas pipeline under the Baltic Sea. It runs from Russia to the Baltic coast in Germany, parallel to the earlier Nord Stream pipeline. The project was envisaged to produce 110 billion cubic metres of natural gas every year, an AP report said. 

Why the US though the project would cripple Ukraine was because the new line meant 

Gazprom, Russia’s state-owned gas giant, could send gas to Europe’s pipeline system without using the existing pipelines that run through Ukraine and Poland.

The pipeline, already filled with gas, is not operational yet as it awaits approval by Germany and the European Commission, the AP report said.

Why Does Russia Want The Gas Pipeline?

Gazprom has said the project will complement the existing pipelines through Belarus and Ukraine, meeting Europe’s growing need for affordable natural gas, according to the AP report.

Gazprom claims Ukraine’s aging system needs refurbishment, and Nord Stream 2 would offer an alternative, and also lower the costs by saving transit fees that need to be paid to Ukraine. Citing the disputes between Russia and Ukraine that led to gas cutoffs in 2006 and 2009 over price and payment, the company also says Nord Stream 2 would avoid such episodes.

As per the AP report, Gazprom’s sales support the Russian government budget, and Europe is a key market for the company. 

The continent faces a gas shortage, and imports most of its gas. Russian President Vladimir Putin has said this should be a reason why Nord Stream 2 should get quick approval. That, however, has increased concerns across the West about Russia using its gas to gain leverage over Europe.

Why Is The US Opposing Nord Stream 2?

The US, along with NATO allies such as Poland, and Ukraine have always opposed the gas pipeline project, saying it will increase Europe’s dependence on Russian gas. There is fear that Russia might use gas as a geopolitical weapon, the AP report said. 

In the US Congress, both Republicans and Democrats have long objected to Nord Stream 2.

The project has even had an impact on the US-German relations, with the former even imposing sanctions against the operator of the pipeline. President Joe Biden waived the sanctions recently in lieu of an agreement from Germany that it will take action against Russia if gas was used as a weapon or if Ukraine is attacked.

After Germany announced its decision to stall the project Wednesday, White House press secretary Jen Psaki posted a tweet welcoming the move.

@POTUS made clear that if Russia invaded Ukraine, we would act with Germany to ensure Nord Stream 2 does not move forward. We have been in close consultations with Germany overnight and welcome their announcement. We will be following up with our own measures today.

— Jen Psaki (@PressSec) February 22, 2022

Germany’s Earlier Stand On Project And Latest Action

While the project was complete, it was awaiting approval by Germany and the European Commission to start operations. The utility regulator of Germany was reviewing the project to check compliance with EU regulations on fair competition, and it’s this certification process that Germany has now suspended.

The regulator’s report that was to say how the pipeline would affect energy security was withdrawn Wednesday, AP reported.

Angela Merkel was Germany’s chancellor when the project went forward. Mecklenburg-Vorpommern, where Merkel had her constituency, is the landfall site for Nord Stream 2. Though the West had reservations about the project, leaders from this north Germany state had defended the Kremlin project throughout, a Reuters report said.

Olaf Scholz, who was Merkel’s finance minister and became her successor in December, and his Social Democratic Party also backed the project. 

In January 2021, regional premier Manuela Schwesig supported the Russian project, and the state parliament voted to set up a special foundation. The charter of Klima-und Umweltschutz MV (Climate and Environment Protection Foundation) said it could “acquire, manage, own, provide or let land, tools and machines to help the completion of the pipeline”, the Reuters report said.

"We believe that it is right to build the pipeline," Schwesig was quoted as telling reporters then. She had also said the US sanctions of 2019 were in self interest. "Nobody who is working on building the pipeline is doing anything wrong. The ones doing something wrong are those who are trying to stop the pipeline," Schwesig said.

However, after Russia stepped up pressure on Ukraine, questions started to be raised around the foundation. On February 9, the Court of Auditors told Reuters that it was concerned Mecklenburg-Vorpommern had largely given up control over the foundation's assets. 

Questions were raised about who was running the “sanctions-busting operation” at the foundation, besides the links between the pipeline and Germany's ruling Social Democrat Party (SPD), and Moscow, the Reuters report said. 

On Wednesday, the foundation said it would stop helping the pipeline project, but did not say what it had done so far to aid it, the report said. 

When Russia started troop build-up near Ukraine’s border initially, Scholz chose nor to speak about Nord Stream 2, though he warned that Russia would face “severe consequences” if it invaded Ukraine.

Finally, after Russia recognised the two rebel-held areas in Ukraine as independent entities,  Germany said it marked a “serious break of international law”, and that a clear signal should be sent to Moscow “that such actions won’t remain without consequences”.