After the United States prevented Congress from completing the Nord Stream 2 gas pipeline and slapped sanctions on it in mid-December, Russia stepped in. Moscow has now vowed to unilaterally complete the project by 2020, utilizing a Russian pipe-laying ship. Ukraine, like most other Eastern European countries, has criticized the project and also warned Germany of Russia’s expansion of power and further dependence on Moscow.

US Sanctions Have Temporarily Derailed North Stream 2

Nonetheless, Russia’s energy minister Alexander Novak said last Friday that he expects the project to be completed in late 2020 despite the temporary halt to construction. Originally, Nord Stream 2 was scheduled for completion in early 2020, with commissioning expected to start a few months later. Around 80 percent of Nord Stream 2 has already been completed. So far, Russian leadership had only spoken of a delay of a few months.

US sanctions had stopped the project when they caused the contracted Swiss company Allseas to pull its ships out of the project. Allseas was unwilling to be punished by the US for its involvement. Unfortunately, particular and specially-designed ships are required to lay the tubes on the bottom of the Baltic Sea, which left the project in temporary shambles.

Russia Promises To Lay Pipe Along The Last 99 Miles Of North Stream 2

However, the Russian ship Akademik Tschersky will now lay the pipes over the last 99 miles (159 km), once it has made its way back from the Far East, where it has been operating and once the needed additional equipment to work in the Baltic Sea has been brought on board. Akademik Tschersky is operated by a subsidiary of Russia’s state energy company Gazprom. A few days ago, Kremlin spokesman Dmitri Peskov said that despite US sanctions Russia had “certain capacities” to complete the natural gas pipeline “in the foreseeable future,” despite the de facto shutdown via the US Congress.

The US sanctions target companies involved in laying the pipeline and their owners. Penalties include entry bans and freezing of assets in the United States. Germany criticized the US sanctions as “serious interference” in internal affairs. Washington, on the other hand, argues that the project led by the Gazprom group increases Russia’s economic and security influence in Europe to a dangerous level.

Ukraine also warned Germany and France of dependence on Russia in the dispute over the construction of the Nord Stream 2 pipeline. Ukrainian Foreign Minister Vadym Prystaiko stated that Germany’s intention to become more independent through Nord Stream 2 had no effect, as the gas would ultimately “still come from Russia.” Besides, the Baltic Sea pipelines would be empty immediately if Russia was no longer inclined to deliver gas, Prystaiko—who also pointed out that Ukraine always has gas and would also be willing to deliver this via Ukranian pipelines—argued.

Washington And Berlin Divided Over NorthStream 2

Nord Stream 2 has been causing controversy between Washington and Berlin for quite some time. The pipeline has already cost almost ten billion euros and was initially supposed to pump gas to Europe by the end of this year. In the future, Nord Stream 2—like Nord Stream 1—will deliver gas directly from Russia to Germany. So far, Russia has used Ukraine as the leading transit country. Currently, Kyiv and Moscow are working on a new agreement for future gas transit to supply Europe, despite the ongoing war in eastern Ukraine and Russia’s role in the conflict.

However, it is also likely that less Russian gas will be transported through Ukraine in the future. Nord Stream 2 is designed for a capacity of 55 billion cubic meters of gas per year. Around 2,300 kilometers of the line with two strands have already been laid.

Meanwhile, Germany has put itself in a rather dubious position right the middle between Russia and the United States. President Trump has long claimed that Germany was uber-dependent on Russia, something the US cannot and will not accept. Congresses’ sanctions are simply the next stage of this conflict in which Germany will eventually need to decide whether Russian gas is worth jeopardizing their bilateral relationship with Washington.

L'articolo North Stream 2 Pipeline Continues To Cause Geopolitical Upheaval proviene da InsideOver.

On Nov. 30, a small town on the Turkish-Greek border named Ipsala hosted a significant event. Azerbaijani gas was pumped to Europe through the much talked about Southern Gas Corridor (SGC), a major element of the EU’s energy policy since it began supplying a new source of natural gas to Europe by skirting Russia. Both Brussels and Washington gave tremendous support to the SGC with the hope that it will boost the European energy security by challenging the monopoly of Russia’s Gazprom in the European market. However, competition with Moscow might turn into cooperation out of necessity.

What is the SGC?

The SGC is reportedly one of the most complex gas value chains ever developed in the world. It crosses seven countries, contains more than a dozen major energy companies and consists of several separate energy projects that the total investment of all is approximately US $40 billion. Along with two plants on the Caspian Sea it consists of three pipelines; starting with the South Caucasus Pipeline (SCPX) from Azerbaijan to Georgia, the second leg is the Trans-Anatolian Natural Gas Pipeline (TANAP) crossing through Turkey and then the Trans Adriatic Pipeline (TAP) passes from Greece to Albania and ends in Italy. In addition to the expansion of the Italian gas transmission network, connections to gas networks in South Eastern, Central and Western Europe is a possibility.

TAP is expected to be finished and ready to supply gas to Europe in 2020 summer. It was completed in Greece and Albania but the construction of the offshore part and reception centre in Italy are yet to be finished. There was a considerable delay due to the objections of regional authorities and environmentalists in Italy. The new Italian government that came to power last year was initially against the project and very reluctant to endorse it since hosting the final part of the TAP might create serious environmental and security problems. Thus, Conte’s government only gave its final approval last October apparently under the strong influence of Washington and Brussels. The legal obligations stemming from the contracts and agreements accepted by the former governments were reportedly also a strong factor.

Is the SGC a threat to Gazprom?

Gazprom reportedly delivered 200.8 billion cubic meters of gas to European markets last year. On the other hand, the capacity of the SGC is 16 billion cubic meters of gas per year. Turkey will get six billion cubic meters and 10 go to Europe.

According to Wood Mackenzie, future expansion is vital for the SGC. Yet Azerbaijan does not have adequate reserves for meaningful growth. Russian experts do not see the SGC as a threat to Gazprom unless Turkmenistan gets involved which will increase its capacity to 60 cubic meters per year. Even though a Trans-Caspian pipeline (TCP) between Azerbaijan and Turkmenistan is technically feasible, the inclusion of Turkmenistan to the SGC is quite problematic since Moscow, as the member of “Caspian Five”, would not permit the construction of the TCP as an opponent. The only other route for the Turkmen gas except Russia is Iran. Yet as Tehran is under sanctions and in odds with Washington, it is not a secure option either. Consequently, the SGC might very well end up in cooperation with Moscow. That would be a nightmare for Washington, which is still trying to clarify another question mark about the massive project.

The SGC for the service of Moscow

According to the Atlantic Council, there is a possibility that Gazprom will be able to book capacity in the TAP, which was granted a third-party access exemption by EU regulations for its initial capacity of 10 bcma (half of its ultimate planned capacity of 20 bcma). That exemption is allowing the gas suppliers to fully book that capacity without open competition. Thus, Moscow would be able to use a strategic project for Europe to boost is position within European energy markets. Even though it is still not possible to access the vital details of the Market Test held by TAP for this purpose and the studies will be completed by January 13, 2020, Gazprom may likely have expressed interest. Therefore, Gazprom can use the TAP expansion to deliver gas from additional lines of TurkStream to Europe as a way to limit or eliminate Ukraine transit. Because of the uncertain future of Nord Stream 2 (NS2), Gazprom may reconsider additional lines of the TurkStream project, which was planned as a four-line system.

Germany Wants Russian Gas

The second line of the TurkStream project (TS2), that will carry gas across the Black Sea to Turkey and on to Europe through Bulgaria, Serbia, and Hungary to Austria is another concern for Washington because of its possible effects on Southeast Europe’s energy security. However, the real alarm is NS2, which is to transfer Russian gas directly to Germany bypassing Ukraine.

Germany is insisting on receiving cheap Russian gas even though it is contrary to the EU’s regulations on pipelines coming from third countries. EU is divided on the issue and Washington is threatening Berlin to apply sanctions within CAATSA (The Countering America’s Adversaries Through Sanctions Act) which includes an article prohibiting EU companies to make big investments in the Russian energy sector. However, that would only worsen already tense relations between Berlin and Washington.

Washington’s sensitivity on the issue reportedly stems from not only the importance it gives the energy security of Europe but also the desire of American LNG producers to flood the European market and become the main gas supplier.

To sum up, it seems quite difficult to compete with Gazprom in Europe in the foreseeable future. To put Gazprom under control by EU regulations to prevent Moscow to use its pipelines for political leverage is a way to curb Russian influence. Yet the best way may be to cooperate with Moscow not to compete. Since common interest is the best way to promote peace. The SGC with its vast capacity for expansion can very well be the symbol of international cooperation on energy which contributes to global peace through the network of pipelines.

L'articolo The Southern Gas Corridor: Competition or Cooperation with Russia? proviene da InsideOver.