Saturday

2nd Jul 2022

US halts building of Russia-Germany pipeline

  • Allseas vessels, such as Pioneering Spirit, could be seized by US authorities (Photo: nord-stream2.com)

US sanctions have interrupted construction of Russia's divisive gas pipeline to Germany, Nord Stream 2.

The measures, signed by US president Donald Trump on Friday (20 December), prompted the Swiss engineering firm laying the pipe, Allseas, to immediately stop work.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Most of the Baltic Sea pipe already in place (Photo: Axel Schmidt)

Allseas "has suspended its Nord Stream 2 pipelay activities" it said on Saturday.

And it would fully comply with US "guidance" on "regulatory, technical, and environmental" details of the sanctions, the firm said.

The US measures called for asset freezes against those "engaged in pipe-laying ... for the construction of the Nord Stream 2 pipeline project".

That meant the US would have seized Allseas' ships - the Audacia, Pioneering Spirit, and Solitaire - if they ever entered American waters after completing the Russian pipe.

It would also have seized the firm's office in Houston, Texas, and barred it from working in the US for years.

"Stop NOW and leave the pipeline unfinished ... or make a foolish attempt to rush to complete the pipeline and risk putting your company out of business," two US senators, Ted Cruz and Ron Johnson, told Allseas CEO Edward Heerema in a letter last week.

Allseas' announcement marked the first major setback for the Russian project since construction began two years ago.

Germany had carved out Nord Stream 2 from EU sanctions on Russia over its invasion of Ukraine.

It had thwarted European Commission attempts to impose EU energy law on the pipe.

Denmark, Finland, and Sweden had granted environmental permits in their waters.

And most of the 1,200km-long pipe had been laid in the Baltic Sea when the US bombshell struck.

Stop NOW

For their part, Germany and Russia vowed to go ahead anyway, setting the scene for another transatlantic clash.

"The [German] federal government rejects such extraterritorial sanctions. They ... represent interference in our domestic affairs," German chancellor Angela Merkel's office said on Saturday.

"Completing the project is essential for European supply security," Russia also said through its Nord Stream 2 consortium in Switzerland.

"We, together with the companies supporting the project, will work on finishing the pipeline as soon as possible," it added.

The supporting companies are five EU energy firms - Engie, OMV, Shell, Uniper, and Wintershall - who, together, invested €5bn in Nord Stream 2 and who also risked losses if it was left "unfinished".

The Russia pipeline clash is just one of several foreign policy and trade imbroglios between the US and Europe since Trump came to power.

And the disputes, including on Iran, Israel, Syria, Nato, trade, and climate, have damaged trust between Western allies.

Upside-down world

For its part, the European Commission never liked Nord Stream 2 on grounds it would entrench EU energy dependence on Russia.

But it liked Trump's way of doing things even less, it said.

"As a matter of principle, the EU opposes the imposition of sanctions against EU companies conducting legitimate business," a commission spokesman told the AFP news agency on Friday.

And for once, Russian propaganda outlets, such as RT, amply quoted German and EU lines, conjuring an upside-down world of EU-Russia unity against US hostility.

Nord Stream 2 has long divided the EU as well as the West more broadly on strategic grounds.

It would enable Russia to pump almost all of its EU gas exports via Germany, allowing the Kremlin to cut off Poland, the Baltic states, or Ukraine for political reasons.

It was seen as a betrayal in eastern Europe, where it had been compared to the Molotov-Ribbentrop pact, a Nazi-Soviet-era deal to carve up the region, and it was mistrusted by Nordic countries.

'Pro-Europe' sanctions

The US ambassador to Germany, Richard Grenell, highlighted those divisions on Saturday.

"We stand with the 15 European countries, the European Parliament, and the European Commission ... who have concerns over Nord Stream 2," he said.

"Our position is pro-Europe ... and many European diplomats are thanking us for this support," he added.

Germany was "particularly surprised" by the US move, Berlin noted, because it came amid incipient breakthroughs in other Russia-Ukraine gas transit disputes.

The commission said it would analyse the US bill before taking a legal position.

"The commission's objective has always been to ensure that Nord Stream 2 operates in a transparent and non-discriminatory way with the appropriate degree of regulatory oversight," a commission spokesman said.

Opinion

Nato's Madrid summit — key takeaways

For the most part Nato and its 30 leaders rose to the occasion — but it wasn't without room for improvement. The lesson remains that Nato still doesn't know how or want to hold allies accountable for disruptive behaviour.

Column

One rubicon after another

We realise that we are living in one of those key moments in history, with events unfolding exactly the way Swiss art historian Jacob Burckhardt describes them: a sudden crisis, rushing everything into overdrive.

News in Brief

  1. EU Parliament 'photographs protesting interpreters'
  2. Poland still failing to meet EU judicial criteria
  3. Report: Polish president fishing for UN job
  4. Auditors raise alarm on EU Commission use of consultants
  5. Kaliningrad talks needed with Russia, says Polish PM
  6. Report: EU to curb state-backed foreign takeovers
  7. EU announces trade deal with New Zealand
  8. Russia threatens Norway over goods transit

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Nato's Madrid summit — key takeaways
  2. Czech presidency to fortify EU embrace of Ukraine
  3. Covid-profiting super rich should fight hunger, says UN food chief
  4. EU pollution and cancer — it doesn't have to be this way
  5. Israel smeared Palestinian activists, EU admits
  6. MEPs boycott awards over controversial sponsorship
  7. If Russia collapses — which states will break away?
  8. EU Parliament interpreters stage strike

Join EUobserver

Support quality EU news

Join us