Nord Stream 2: Why It Is Significant For Russia – Explained

The focus on Nord Stream 2 gas pipeline is back even as tensions simmer between Russia and Ukraine amid latest move by Moscow.

New Delhi: The focus on Nord Stream 2 gas pipeline is back even as tensions simmer between Russia and Ukraine amid latest move by Moscow. Germany suspended the process of certifying the Nord Stream 2 gas pipeline from Russia after President Vladimir Putin recognised separatist-held regions in eastern Ukraine. In an announcement, German Chancellor Olaf Scholz said he took the decision as Russia’s actions against Ukraine marked a “serious break of international law.”

“Now it’s up to the international community to react to this one-sided, incomprehensible and unjustified action by the Russian president,” Olaf Scholz said, according to news agency The Associated Press. Olaf Scholz said it was necessary to “send a clear signal to Moscow that such actions won’t remain without consequences.”

“The situation now is fundamentally different,” Scholz said Tuesday, explaining that the government had decided to withdraw a report on the impact that the pipeline — which hasn’t begun operating yet — would have on the security of Germany’s gas supplies.

“That may sound technical, but it’s a necessary administrative step without which the certification of the pipeline cannot happen now,” Scholz said.

Pipes at the landfall facilities of the ‘Nord Stream 2’ gas pipline are pictured in Lubmin, northern Germany, on February 15, 2022. (Photo: AP)

Nord Stream 2 pipeline: How Russia reacted to Germany’s move

Dmitry Medvedev, the deputy chair of Russia’s Security Council, slammed the German government’s decision to halt certification of the pipeline. “Welcome to the brave new world where Europeans are very soon going to pay 2,000 euros for 1.000 cubic meters of natural gas!,” Medvedev, the former president of Russia, said.

The spot market gas price in Europe was 829 euros ($940) per thousand cubic meters Tuesday. It was 1,743 euros (nearly $2,000) in late December amid jitters over the Ukraine crisis, and prices have since fallen as Europe has secured more LNG.

What is Nord Stream 2 pipeline

The undersea Nord Stream 2 pipeline directly links Russian gas to Europe via Germany and is complete but not yet operating. It’s a 1,230-kilometer-long (764-mile-long) natural gas pipeline under the Baltic Sea. The Nord Stream 2 pipeline runs from Russia to Germany’s Baltic coast. It runs parallel to an earlier Nord Stream pipeline and would double its capacity, to 110 billion cubic meters of gas a year. It means Russia state-controlled oil producer Gazprom can send gas to Europe’s pipeline system without using existing pipelines running through Ukraine and Poland. The pipeline has been filled with gas but it was awaiting approval by Germany and the European Commission.

Nord Stream 2 pipeline directly links Russian gas to Europe via Germany. (Photo: AP)

Washington has for years also argued that building another pipeline bringing natural gas from Russia to Germany — especially one that bypasses Ukraine — increases Europe’s reliance on Russian energy supplies.

Why is Nord Stream 2 pipeline important for Russia

While Europe needs Russian gas, Gazprom relies on the European market for sales to support Russian government budgets. The European Union has been able to force Gazprom to comply with many of its anti-monopoly rules in recent years.

A sign reading “Nord Stream 2 Committed. Reliable. Safe.” hangs above a painted map of the Nord Stream 2 pipeline from Russia to Germany at the natural gas receiving station in the Lubmin industrial estate in Lubmin, Germany, Nov 16, 2021. (Photo: AP)

Gazprom said it will meet Europe’s growing need for affordable natural gas and complement existing pipelines through Belarus and Ukraine. Europe imports most of its gas and gets around 40 per cent from Russia. Nord Stream 2 would offer an alternative to Ukraine’s aging system, lower costs by saving transit fees paid to Ukraine and Poland, and avoid episodes like brief 2006 and 2009 gas cutoffs over price and payment disputes between Russia and Ukraine.

Meanwhile, the US, European NATO allies such as Poland, and Ukraine have opposed the Nordstream 2 pipeline project. They are of the view that it gives Russia the possibility of using gas as a geopolitical weapon.