Can Moscow finish Nord Stream 2 gas pipeline despite US sanctions? ‘Never say never’ says Gazprom

Russia’s $10 billion Nord Stream 2 pipeline - which will pump gas more than 1,200 km to Germany - has been sanctioned by Washington, with US officials claiming Moscow can’t finish the project. “Never say never,” Gazprom replied.

The Nord Stream 2 pipeline, a joint project between Russian energy giant Gazprom and five European firms, was sanctioned by the US Congress in December. The State Department followed this with an ultimatum to the European firms working on the project: “immediately cease construction-related activity.”

The warning was enough to scare away Swiss pipelaying firm Allseas Group SA, and for those remaining, another sanctions bill is under consideration in Washington, German business newspaper Handelsblatt reported this month.

With around 160km of pipeline unfinished, US Energy Secretary Dan Brouillette told Bloomberg on Saturday that “it’s going to be a very long delay, because Russia doesn’t have the technology” to finish the pipe without Allseas’ expertise.

“Never say never,” Gazprom spokesman Sergei Kupriyanov responded on Sunday, speaking to Russian business news outlet RBK.

The US’ sanctions efforts may have delayed the pipeline’s completion, but Kupriyanov will likely be proven right. Russian Energy Minister Alexander Novak announced late last year that the remaining 160km will be finished by a Russian pipelaying vessel, currently en route to the North Sea from Russia’s east coast. Moscow now estimates the pipeline will be finished by early 2021 at the latest.

Once completed, Nord Stream 2 will supply Europe with up to 55 billion cubic meters (bcm) of natural gas per year, on top of the 55 bcm already pumped through Nord Stream 1 every year since 2011. Its completion would transform Germany into a regional gas hub, and would see Washington pushed out of supplying Europe’s gas demand.

The Trump administration has attempted to lure European countries away from Russian gas with the promise of “molecules of freedom” - Liquefied Natural Gas (LNG) shipped across the Atlantic.

However, Washington’s offer has been met with little interest in Europe, due to its higher cost compared to the Russian product. While Poland has stepped up its imports of American gas, German Chancellor Angela Merkel has criticized the American sanctions and pledged to see the Nord Stream 2 project through to completion. The only European states to side with Washington have been Ukraine and Poland, who currently charge Russia transit fees to operate underground pipelines in their territory.

The project “will be completed despite all these threats,” Russian Foreign Minister Sergey Lavrov said in December. “Europeans understand their commercial interest… [and] they are interested in ensuring long-term energy security.”  

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