December 21, 2019
The U.S. has long opposed the Nord Stream 2 pipeline, arguing it will leave Europe overly dependent on Russia for energy supply and extend Vladimir Putin’s influence over the continent.
Nord Stream 2 is being led by Russia’s state energy company Gazprom. TOBIAS SCHWARZ / AFP – Getty Images
By Linda Givetash | NBC News
Russia vowed Saturday to press ahead with building a controversial natural gas pipeline to Europe in spite of new sanctions imposed by President Donald Trump.
“Russia has implemented and will continue to implement its economic projects regardless of anyone’s sanctions,” the country’s foreign ministry said in a statement.
Trump enacted legislation Friday that will sanction companies and individuals involved in laying the Nord Stream 2 pipeline through the Baltic Sea from Russia to Germany.
The U.S. has long opposed the 750-mile pipeline, arguing it will leave Europe overly dependent on Russia for energy supply and extend President Vladimir Putin’s influence over the continent.
Trump said last year that “Germany is a captive of Russia,” in an apparent reference to the pipeline. The comments caused a stir at the start of a tense NATO summit.
Friday’s legislation threatening U.S. sanctions had an immediate impact, with a company that operates ships laying sections of the undersea pipeline saying Saturday it had suspended activities relating to the project “in anticipation of the enactment of the National Defense Authorization Act (NDAA).”
Switzerland-based Allseas said it will seek “guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant U.S. authority.”
However those behind the project insisted it would go ahead in spite of the U.S. efforts.
Construction of the pipeline is already well advanced, and it wasn’t immediately clear what the impact will be.
“Completing the project is essential for European supply security,” said Nord Stream 2 spokesman Jens Mueller in a statement.
“We together with the companies supporting the project will work on finishing the pipeline as soon as possible.”
Russia provides about 37 percent of Europe’s natural gas, and currently, the bulk of it moves through Ukraine’s pipelines.
The Nord Stream 2 project would double the amount of gas Russia can send directly to Germany and allow it to bypass Eastern European nations like Poland and Ukraine.
But Russia doesn’t have the capability to install undersea pipelines and is relying on the technological expertise of European companies.
Germany has been vehemently opposed to the sanctions but was unsuccessful lobbying against them.
“The German government rejects such extraterritorial sanctions,” spokeswoman Ulrike Demmer said in a statement.
“They affect German and European companies and constitute an interference in our domestic affairs.”
While the sanctions pose problems for some, Ukraine hoped it could be a game changer by giving Kyiv more leverage in negotiations with Moscow over the future use of its pipelines.
In an interview with NBC News last week, the CEO of Ukraine’s state-owned energy company Naftogaz, Andriy Kobolyev, said the sanctions would have a major impact on the stalled negotiations between Russia and Ukraine over the transport of natural gas to Europe.
“I believe the European gas market will benefit significantly, and Ukraine will benefit,” he said.
On Saturday, the two countries’ gas operators reached a new five-year deal in Vienna that would see Moscow pay $2.9 billion to Kyiv to maintain access to their pipelines. In exchange, Ukraine would drop outstanding legal claims against Russia by Dec. 29.
The transmission tariff for Russian gas will increase, however, Ukraine’s energy minister said.