Russia deploys new vessel to finish Nord Stream 2, gas 'price war' looms
Russia is defying threats from the U.S. over the controversial Nord Stream 2 gas pipeline, making plans to finish the German-Russian project despite American pressure on companies working on the pipeline, Angela Hennersdorf, Malte Fischer and others write in WirtschaftsWoche. In early February, Russia reportedly began transferring its pipeline construction vessel Akademik Cherskiy from a harbour on the Pacific coast to the Baltic Sea. It will replace a ship provided by Swiss company Allseas, which was withdrawn due to U.S. threats to sanction all parties involved in the construction of Nord Stream 2. The pipeline, which was due to be finished by now, remains about 150 kilometres short of Lubmin, its destination on the German coast. Meanwhile, Germany is benefitting from the current collapse in oil prices, the authors write. That collapse is partly due to Russia's "price war" with Saudi Arabia, which has brought prices to their lowest levels since 2003. Germany usually spends about 3 percent of its gross domestic product on oil imports and, at current rates, the price reduction will reduce the bill by about one percentage point, WirtschaftsWoche writes. According to the article, a similar downward spiral for natural gas prices may be possible if Russia applies a similar approach as with oil, with the effect that imported liquefied natural gas (LNG) from the U.S. would no longer be able to compete with Russian supplies. In 2019, LNG from the U.S. pushed Russia's major gas supplier, Gazprom, into the first contraction of its European business in several years, the article says.
The importance of natural gas for Germany is set to grow further amid the country's energy transition, and economy minister Peter Altmaier has said the government is "determined and ready" to intensify trade with Russia despite U.S. resistance. In February, the International Energy Agency (IEA) urged Germany to import LNG to diversify supply options as the nuclear and coal phase-outs increase demand.