Nord Stream 2: Twists and turns of a controversial gas pipeline
The Biden administration in mid-March made clear it is committed to complying with the sanctions legislation put in place with bipartisan support in Congress, and called on companies involved to "immediately abandon work on the pipeline". This dampened expectations for a deal between Germany and the U.S.
German, U.S. and international media such as Handelsblatt, Wall Street Journal and the Financial Times had reported in mid-February that the administration of new President Joe Biden might be willing to make a deal with Germany on Nord Stream 2, according to government sources. A deal could involve waiving sanctions in turn for an agreement that Germany would shut off future natural gas deliveries through the pipeline, for example in case Russia put pressure on Ukraine.
After more than a year of threatening to do so, the U.S. had introduced first sanctions on 19 January, former president Donald Trump’s final full day in office. The administration sanctioned the Russian ship Fortuna, which later resumed pipe-laying in Danish waters on 6 February.
The pipeline was originally scheduled for completion by the end of 2019. About 2,300 km out of approximately 2,460 km had been laid by December 2019, when Swiss pipelaying company Allseas suspended activity following the introduction of U.S. sanctions legislation. By mid-February 2021, about 150 km – 75 km per strand of the twin pipeline – still had to be completed, mostly in Danish and to some extent in German waters.
15 April 2021: Germany will violate its Paris Climate Agreement obligations if it sticks to current infrastructure plans for natural gas, warns the German Institute for Economic Research (DIW). The researchers say the country must rapidly exit the fossil fuel, instead of continuing its plans for new natural gas power stations, import terminals and the Nord Stream 2 pipeline. Natural gas should not be considered a "bridging technology" on the way to climate neutrality, the DIW adds.
14 April 2021: NGO Environmental Action Germany (DUH) files a lawsuit against the continued construction of the pipeline. DUH says it directs the lawsuit against the approval of the construction work in German waters, particularly during birds’ sensitive resting periods, by the Federal Maritime and Hydrographic Agency (BSH), which oversees the process. The BSH previously rejected the NGO's objection.
12 April 2021: President Joe Biden is not willing to compromise on the project and is "determined to use all available means to prevent the completion of Nord Stream 2," U.S. Berlin embassy spokesman Joseph Giordono-Scholz tells newspaper Tagesspiegel.
1 April 2021: Germany’s transatlantic coordinator Peter Beyer calls for a construction moratorium on the pipeline in a bid to repair transatlantic relations. Beyer says the project is a “serious stumbling block” for the restart of relations with the United States. “European sovereignty must not be misunderstood or reinterpreted as a fortress Europe,” he says. “Strong Europe – yes. Isolation from the USA – no.”
1 April 2021: Germany’s Federal Maritime and Hydrographic Agency (BSH), which granted Nord Stream 2 a permit for a short period in German waters on 14 January 2021, rejects objections from environmental organisations Nature and Biodiversity Conservation Union (NABU) and Environmental Action Germany (DUH). The BSH says that, based on the impact assessment of the Federal Nature Conservation Act, the relocation of the Fortuna vessel is expected to cause “no significant impacts on the marine environment or the conservation objectives of the Pomeranian Bay Bird Sanctuary.” Shortly after, DUH announces it will take legal action against the BSH. The environmental organisation argues that the maritime organisation did not sufficiently examine nature conservation and climate impacts when approving the pipeline construction.
26 March 2021: The NGO Environmental Action Germany (DUH) files a lawsuit against the state government of Mecklenburg-Western Pomerania, where the Nord Stream 2 pipeline would land. DUH wants access to information concerning the Foundation for Climate and Environmental Protection, an entity the state set up to support completion of the pipeline. But the state is keeping details about the foundation from the public, says DUH. “In order to protect Nord Stream 2, the state government is even willing to disregard legally guaranteed information rights,” says DUH director Sascha Müller-Kraenner.
18 March: The Biden administration reiterates the project is a “bad deal” for Germany, Ukraine and Central and Eastern European countries, and a “geopolitical project intended to divide Europe and weaken European energy security.” In his statement, U.S. secretary of state Antony Blinken says the Biden administration is committed to complying with sanctions imposed by Congress. “The Department reiterates its warning that any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline.”
1 March 2021: The “climate” foundation that was set up by the state of Mecklenburg-Western Pomerania in an effort to complete the construction of the pipeline is a matter for the state itself, the German government says in an answer to a parliamentary question asked by the Green Party. The party inquired about the government’s stance on the establishment of the foundation, arguing the foundation is only there to facilitate the completion of the controversial pipeline.
25 February: Oil and gas company Wintershall Dea limits investments in Nord Stream 2, according to the company’s 2020 annual report. The company limited its original loan of up to 950 million euros for the gas pipeline to 730 million euros, the Frankfurter Allgemeine Zeitung writes. "Further disbursements are not planned,” the report said.
24 February: Researchers Brick Medak and Felix Heilmann of think tank E3G call on German chancellor Merkel to take the reins on Nord Stream 2, agree a moratorium on the construction and organise a summit with key actors Russia, the U.S., Ukraine, eastern European countries, the European Commission, the companies involved and civil society. “Now is the time for diplomacy,” they write in an op-ed in Tagesspiegel Background. Parallel to the summit, an international panel of experts should be commissioned to shed light on the energy and climate policy background of the pipeline in a study, they say.
23 February: Eighteen European companies have withdrawn or are in the process of withdrawing from the pipeline project following U.S. sanctions threats, according to a U.S. state department report for Congress submitted on Friday (19 February). "This shows that the legislative goals and our actions have been successful," U.S. state department spokesman Ned Price said. "We continue to monitor companies involved in potentially sanctionable acts."
22 February 2021: Polish foreign minister Zbigniew Rau and Ukrainian foreign minister Dmytro Kuleba call for an end to Nord Stream 2, as it damages the “strong, vibrant and resilient West”, the ministers write in an opinion piece published by Politico. The United States can play an important role in preventing the completion of the pipeline, the ministers say.
20 February 2021: The Biden administration singles out a Russian ship for violating U.S. sanctions on the construction of the pipeline, Bloomberg reports. Like in the first round, the U.S. sanctions the ship Fortuna. Not sanctioning German entities involved can be seen as reflecting reported decisions by the new administration not to challenge Germany over its support for the pipeline, in an effort not to antagonise a key European ally.
19 February 2021: The U.S. might hold off on sanctioning German companies involved in the Nord Stream 2 project, as the Biden administration seeks to halt the project without antagonizing a close European ally, Bloomberg reports. It would instead put only a small number of Russia-linked entities on the list.
16 February 2021: The Biden administration might be willing to make a deal with Berlin on Nord Stream 2, according to German media sources. However, it remains unclear whether Biden would even consider doing so in the face of clear bipartisan opposition in the U.S. Congress. A deal could involve waiving sanctions in exchange for an agreement that Germany would stop future natural gas deliveries through the pipeline, for example in case Russia puts pressure on Ukraine.
9 February 2021: German environmental NGO Umwelthilfe publishes a letter written by German finance minister Olaf Scholz to former U.S. counterpart Steven Mnuchin. In the letter, dated 7 August 2020 and reported by Zeit in September 2020, Germany offers financial support for German liquid natural gas (LNG) importers to enable them to directly import U.S. LNG in a bid to prevent the U.S. from imposing sanctions on the Nord Stream 2 pipeline.
9 February 2021: German president Frank-Walter Steinmeier defends the pipeline by pointing at the "bigger picture", including Germany's invasion of the Soviet Union during WWII, in an interview with German newspaper Rheinische Post. The presidents' comments leave Ukraine angry as they ignore the Ukrainian victims of the war. The Ukrainian ambassador says the president's stance was met with "surprise and indignation" in Kyiv.
6 February 2021: The construction of the pipeline with the Russian vessel Fortuna restarts in Danish waters despite U.S. sanctions.
1 February 2021: France urges Germany to drop the Nord Stream 2 project in light of the arrest of Russian opposition leader Alexei Navalny.
21 January 2021: The European Parliament calls for a halt to Nord Stream 2 after the arrest of Russian opposition leader Alexei Navalny. On the same day, Merkel reaffirms her support for Nord Stream 2, despite growing opposition in Germany and the EU. “My basic attitude has not yet changed to the point where I say the project should not exist,” Merkel says at a press conference in Berlin.
19 January 2021: The U.S. announces sanctions for the first time – on the Russian pipe laying vessel Fortuna. The German government says it “notes” the decision “with regret.” Previously, there had only been a threat of sanctions.
15 January 2021: Nord Stream 2 receives a renewed construction permit from Germany’s Federal Maritime and Hydrographic Agency (BSH) for a short stretch in German waters after the original permit had run out. Rresearchers from the German Institute for Economic Research (DIW) question whether Germany needs the pipeline for its natural gas supply.
6 January 2021: The parliament of the German federal state of Mecklenburg-Western Pomerania, where the Nord Stream 2 pipeline would land, sets up a “climate” foundation in an effort to circumvent the threat of U.S. sanctions. To justify its purpose of finalising Nord Stream 2, the pipeline is highlighted as a special contribution to energy security and a source of natural gas, the energy transition’s "bridging technology.” Environmentalists criticise the plans and say they will fuel the climate crisis. German political analyst Thomas O'Donnell of the Hertie School of Governance says the plan is unlikely to work, as “no company […] will sell equipment to this foundation.”
1 January 2021: The U.S. Congress authorises new sanctions against companies involved in the construction of the pipeline.
28 December 2020: The Russian pipe laying vessel Fortuna leaves the Nord Stream 2 construction site in the Baltic Sea, indicating that the construction in German waters may have been completed.
11 December 2020: The pipeline’s construction continues with the Russian pipe laying vessel Fortuna, which completes a short 2.6 km stretch in German waters.
30 November 2020: Certification company DNV-GL suspends certification work for vessels involved in the pipeline project citing possible sanctions under the Protecting Europe's Energy Security Act (PEESA) as the reason.
23 November 2020: The U.S. increases pressure on people and companies associated with the construction of the pipeline and its leaders make several direct phone calls. "We are making these calls to warn them and give them time to get out," said a U.S. administration representative.
3 September 2020: German politicians call for halt to the Nord Stream 2 project following the poisoning of Alexei Navalny. Norbert Röttgen, a lawmaker with German chancellor Angela Merkel’s conservative Christian Democratic Union (CDU), calls for a “clear European response” and says “diplomatic rituals” would no longer suffice as a reaction to Russia’s “inhumane politics.”
28 August 2020: The poisoning of Alexei Navalny and the completion of the natural gas pipeline are “separate issues,” and linking them would “not be appropriate,” German chancellor Angela Merkel says during her annual press conference in Berlin. Navalny was treated a hospital in Germany earlier in the month after being poisoned in Russia.
12 August 2020: Utility company Uniper, one of the investors in the Nord Stream 2 project, publishes a report saying the pipeline could be delayed or even fail altogether due to the threat of U.S. sanctions.
7 August 2020: Three Republican senators threaten that the U.S. will impose "crushing legal and economic sanctions" on the port of Sassnitz on the German Baltic Sea, a key hub for the Nord Stream 2 pipeline.
5 August 2020: Environmental Action Germany (DUH) says it is suing to stop Nord Stream 2 from going into operation over methane leakage concerns.
15 July 2020: The U.S. threatens investors to ditch Nord Stream 2. It is meant as a “clear warning” to companies that aiding the project would not be tolerated by Washington. “Get out now, or risk the consequences,” secretary of state Mike Pompeo said.
18 June 2020: All parties in the German parliament reject the economic sanctions threatened by the U.S. In a statement released by parliament's economy and energy committee, the MPs said that "there has been solid cross-party unanimity that these extraterritorial sanctions are in violation of international law and cannot be accepted."
8 June 2020: German officials condemn U.S. plans to expand NS2 sanctions, shortly after several U.S. senators, including Ted Cruz (Republican) and Jeanne Shaheen (Democrat) presented a bill that would expand existing sanctions and penalise all companies involved in the project.
May 2020: Russia defies threats from the U.S. and deploys a new vessel to finish the construction of Nord Stream 2. The vessel, Akademik Cherskiy, replaces a ship provided by Swiss company Allseas, which was withdrawn from the construction in December 2019 following U.S. threats.
19 February 2020: German economy minister Peter Altmaier criticises the Nord Stream 2 sanctions and says the importance of Russian gas for Germany is set to grow further amid the German energy transition. Altmaier says he regrets the decision by the U.S. to impose sanctions and stresses that Germany is going to "need more natural gas, not less" as it phases out coal-fired power production over the next years.
11 January 2020: Nord Stream 2 could be finished by the end of 2020 or the first quarter of 2021, Russian president Vladimir Putin says during a press conference, following a meeting with German chancellor Angela Merkel in Moscow.
30 December 2019: Russian and Ukrainian companies sign a final five-year agreement safeguarding Russian gas transit to Europe via Ukraine.
21 December 2019: The Swiss offshore contractor Allseas suspends its Nord Stream 2 pipe-laying activities, anticipating the enactment of the U.S. sanctions as President Donald Trump signs legislation. The move effectively halts construction for about a year.
19 December 2019: German chancellor Angela Merkel criticises the U.S. sanctions to be imposed on companies working on Nord Stream 2, shortly after the relevant legislation was approved by the U.S. Senate. “We are opposed to extraterritorial sanctions,” Merkel said during question time in the national parliament.
8 February 2019: EU member states agree to a last-ditch deal struck by France and Germany that introduces tougher requirements for the Nord Stream 2 pipeline, but does not endanger the project as a whole.
January 2019: The U.S. ambassador to Germany, Richard Grenell, writes letters to companies involved in the construction of Nord Stream 2, urging them to stop working on the project and threatening them with the possibility of sanctions.
4 December 2018: German foreign minister Heiko Maas says Germany will not withdraw its political support for Nord Stream 2, despite tensions between Ukraine and Russia.
14 November 2018: The U.S. ambassador to the EU, Gordon Sondland, threatens sanctions on Nord Stream 2 and says the U.S. has “not deployed the full set of tools yet” to thwart the completion of the pipeline.
24 October 2018: Polish president Andrzej Duda calls for a stop to Nord Stream 2 during a visit to Germany, arguing that it would upset the “energy balance.”
19 September 2018: Germany says it will choose a location for its first liquefied natural gas (LNG) terminal by the end of the year as a gesture to the U.S., which wants to ship more gas to Europe. (By February 2021, there was still no final investment decision on a domestic German LNG terminal)
21 August 2018: Russia says it is ready to defy “illegal” U.S. sanctions against Nord Stream 2, as the U.S. administration reiterates its threat to impose sanctions on companies involved in the project.
18 August 2018: Russian President Vladimir Putin and German chancellor Angela Merkel meet near Berlin to discuss issues surrounding Nord Stream 2, including the possible disadvantages for Ukraine. Merkel reiterates that “Ukraine has to play a role also with Nord Stream 2 in place.”
11 July 2018: US president Donald Trump lashes out at Nord Stream 2 and says Germany is “totally controlled by” and “captive of” Russia, as the natural gas pipeline will increase Germany’s reliance on Russian energy resources.
18 May 2018: Ukrainian president Petro Poroshenko says the Nord Stream 2 project would empower Moscow to “attack our common values” and the pipeline would be “a tragic historic mistake.”
28 March 2018: With the Federal Maritime and Hydrographic Agency (BSH), the last German authority approves the construction and operation of Nord Stream 2.
31 January 2018: Germany grants Nord Stream 2 a permit for construction and operation in German waters and landfall areas near Lubmin.
25 April 2017: To find an alternative way to get the project going, Uniper, Wintershall, ENGIE, OMV and Royal Dutch Shell sign a financing agreement with Nord Stream 2 AG, a subsidiary of Gazprom responsible for the development of the Nord Stream 2 project.
12 August 2016: Gazprom’s partners ENGIE, Gazprom, OMV, Shell, Uniper and Wintershall withdraw their application for merger approval from the Polish competition authority for Nord Stream 2. Gazprom says the withdrawal will not affect the construction of the pipeline.
7 March 2016: Eight EU leaders sign a letter objecting to Nord Stream 2 citing geopolitical reasons.