TOPIC PAGE: Nord Stream 2

Author: Diane Pallardy

2020/11/20

LONDON (ICIS)--The Nord Stream 2 natural gas pipeline will double Russia’s direct export capacity to Germany as a first entry point to the EU to 110 billion cubic meters (bcm) per year.

Its supporters, including Germany and other west-European member states, see it as a commercially sensible project, but its opponents, led by Poland and the US, consider it as a threat to the EU’s security and diversity of supply.

In December 2019, US sanctions forced key pipelaying vessels to stop working on the project. In mid-January, President Putin said Russia could finish building the pipeline on its own but its completion would be delayed to up to the end of 2020 or in the first quarter of 2021.

The Russian pipeline was initially scheduled for completion by the end of 2019. Delays beyond 2020 could restrain Russia’s pipeline export capacity to the EU.

This topic page brings together updates from ICIS on the pipeline's progress and the impact it is having on energy markets.

LATEST UPDATES

1 December 2020

Construction of Russia’s Nord Stream 2 gas pipe expected to resume 5 December

On 27 November the German Waterways and Shipping Authority Stralsund published a note indicating that pipe-laying work on the Nord Stream 2 natural gas pipeline linking Russia to Germany would resume on 5 December.

23 November 17:57

German association urges US to halt Nord Stream 2 sanctions

Potential US sanctions currently under discussion against companies involved in the Nord Stream 2 project could weigh on US-EU talks surrounding the pipeline once the new US administration settles, Oliver Hermes, chairman of the German Eastern Business Association (Ost-Ausschuss der Deutschen Wirtschaft), has said.

18 November 16:41

US Senate expands sanctions against Russia’s Nord Stream 2 gas pipeline project

The US Senate included new sanctions against the Nord Stream 2 pipeline project in a key US legislative act on 16 November.

Washington has long been trying to stop the offshore pipeline between Russia and Germany. In December 2019, the US made the construction to go on hold by forcing the pipe-laying vessels contracted for the project to withdraw from it.

10 November 2020 16:05

All Nord Stream 2 investors appeal Poland fine

On 5 November, Wintershall, Shell and Engie’s Switzerland-based subsidiary appealed against the fine imposed by Polish antimonopoly authority UOKiK over the Nord Stream 2 project, the companies confirmed to ICIS. This means all six Nord Stream 2 investors have appealed the Polish decision. Back in early October, UOKiK fined the investors a total of €6.5bn for implementing the pipeline project without Poland’s consent.

6 November 2020 14:43

Russian gas producer Gazprom appeals Nord Stream 2 fine

Russian producer Gazprom has appealed against Poland’s €6.5bn fine over the Nord Stream 2 pipeline project. Two other investors involved in the project will also appeal, while the rest are considering the option.

21 Oct 20 17:30

Berlin keeps supporting Nord Stream 2, Washington updates sanctions

German foreign minister Heiko Maas said Nord Stream 2 will be completed but the timing remains uncertain, the Foreign Office showed on its website on 17 October.

07 Oct 20 15:47

Polish antimonopoly authority fines Nord Stream 2 gas pipe investors €6.5bn

The Polish antimonopoly authority (UOKiK) fined the investors of the Nord Stream 2 pipeline a total of Polish Zloty 29.3bn (€6.5bn) for implementing the project without UOKiK’s required consent, the authority announced on Wednesday.

In April 2017, the investors - Russia’s Gazprom, France’s Engie, Germany’s Wintershall and Uniper, Austria’s OMV and international conglomerate Shell – agreed to co-finance the €9.5bn offshore project, with Gazprom responsible for €4.75bn and the other five investors contributing €950m each in loans to Nord Stream 2 AG, a Gazprom subsidiary. Gazprom is the sole stakeholder in the project.

17 Aug 20 17:57

EU Delegation opposes US sanctions on Russian gas pipe

An EU delegation in Washington has officially opposed the US threat of additional sanctions against the Nord Stream 2 pipeline project last week, an EU spokesperson for foreign affairs and security confirmed on Monday.

This step marks a shift towards a more concerted EU stance, which could put more pressure on the US to find a compromise and water down its position. Before that, opposition to US sanctions had been sparse and coming mostly from Germany.

12 Aug 2020 16:00

Nord Stream 2 gas pipe EU investors cry foul over US sanctions

German utility Uniper and Austrian OMV expressed growing concerns regarding Washington’s intensifying efforts to stop Russia’s Nord Stream 2 pipeline from completion.

Uniper and OMV account for 20% of the pipeline’s €9.5bn financing, with French Engie, German Wintershall and Dutch Shell covering 10% each and Russia’s Gazprom the remaining 50%.

03 Aug 2020 16:58

Polish antitrust authority fines Gazprom over Nord Stream 2 gas pipeline probe

The president of the Polish Office of Competition and Consumer Protection (UOKiK) has imposed a Polish Zloty (Zl) 213m (€48m) fine on Gazprom for failing to cooperate in an investigation into the construction of the Nord Stream 2 pipeline, UOKiK stated on Monday.

24 July 2020 13:04

Russia’s Nord Stream 2 looks to appeal court rulings

Developers of the Russian Nord Stream 2 natural gas pipeline have until 30 July to appeal an EU General Court ruling against allowing a derogation from third party access rules.

Nord Stream 2 had looked to the court to reverse a decision on applying EU access and unbundling regulations to pipelines connecting to the trading bloc from non-member states.

This came through amendments to the gas directive and made it less likely that Russian producer Gazprom will be able to secure full access to Nord Steam 2 after the link is completed.

16 July 2020 17:16

US threatens Nord Stream 2 gas pipe investors with sanctions

The five European companies providing half of the Russian Nord Stream 2 pipeline’s financing could fall under US sanctions after the state department withdrew a key cut-off date in its legislation. But this is unlikely to translate into actions, according to experts who spoke to ICIS.

06 July 2020 14:55

Russia’s Nord Stream 2 may restart gas pipelay from 3 August

On 6 July the Danish Energy Agency announced Nord Stream 2 can use pipe-laying vessels with anchors to finish the offshore section of the natural gas pipeline that will double direct Russian export capacity to Germany.

This potentially means the project developers can resume construction from 3 August.

17 June 2019 15:58

Nord Stream 2 pipelay could restart in July

The Danish Energy Agency expects to be able to make a decision in the next four weeks on whether to allow anchor vessels to restart work on the Russian pipeline Nord Stream 2.

If the agency approves the use of these vessels, pipelay in Denmark could resume from mid-July, provided there is no delay to observe and the yet-to-be-confirmed pipe-laying vessel is ready.

05 June 2019  16:16

US senators call for more Nord Stream 2 sanctions

Several US senators have called for more sanctions against Nord Stream 2, a natural gas pipeline that will double Russian direct export capacity to Germany.

11  May 2020 16:24

Germany to reject derogation for Russia’s Nord Stream 2 natural gas pipeline

Germany’s regulator BNetzA intends to reject a derogation request that would allow Russian Gazprom full access to Nord Stream 2 - an offshore pipeline that will double Russia’s direct pipeline capacity to Germany to 110 billion cubic meters (bcm) per year.

05  May 2020 07:20

German regulator consults on Nord Stream 2 derogation decision

German regulator BNetzA has sent its intended decision on potential derogation of Russia’s Nord Stream 2 pipeline project from EU rules to parties that are involved in the process.

The consultation will last until 8 May.

The derogation would exempt the project from EU rules enforcing third party access to pipeline capacity, and legal separation of Gazprom as the owner of the pipeline from suppliers of gas using it. In reality, Gazprom is the only potential supplier from Russia.

01  April 2020 06:00

Poland unlikely to prevent derogation for Nord Stream 2 gas pipeline

Despite Poland’s vocal criticism of the Russian Nord Stream 2 pipeline, its inclusion in the derogation procedure initiated by Germany does not mean the derogation has become less likely, experts told ICIS.

10  February 2020 17:47

Nord Stream 2 gas link completion may be possible with Russian ships

There are two pipe-laying vessels owned by Russian companies that could complete the Nord Steam 2 natural gas pipeline, although backers of the project have yet to provide plans.

There is about 7% still to be completed, all in the Danish Exclusive Economic Zone (EEZ), after Swiss company Allseas ceased work on the link due to US sanctions.

3 February 2020, 12:28

Final technical, legal hurdles for Nord Stream 2 resolvable 

Experts believe legal and technical challenges to the start of Nord Stream 2 flows can be resolved.

Once completed, Nord Stream 2 will double Russia’s direct export capacity to Germany as a first entry point to the EU to 110 billion cubic meters (bcm)/year.

20 January 2020, 17:32

More Nord Stream 2 delays could cut 20bcm of Russian gas supply to Europe

Europe could face a shortfall of over 20 billion cubic meters (bcm) of Russian gas supply in 2021 from 2020’s levels if Nord Stream 2 is delayed beyond 2020 and European demand remains stable.

16 January 2020, 16:11

Croatian EU presidency’s focus: Energy Charter Tearty, energy transition

In the first six months of 2020, the Croatian presidency of the EU will follow the process of modernisation of the Energy Charter Treaty (ECT) - a crucial agreement that can affect the way the controversial Russian pipeline Nord Stream 2 is operated.

14 January 2020, 16:39

German regulator considers exempting Nord Stream 2 gas pipeline from EU rules

German energy regulator BNetzA has until 24 May 2020 to publish its decision regarding a potential exemption from EU rules for the Nord Stream 2 pipeline.

13 January 2020, 16:17

Nord Stream 2 to launch by end of 2020 or Q1 2021 - Putin

The Russian pipeline could be finished by the end of this year or in the first quarter of 2021, president Vladimir Putin said at a press conference following a meeting with German chancellor Angela Merkel on 11 January.

19 December 2019, 16:17

Nord Stream 2 sanctions to apply as soon as law is signed - US senators

Two US senators sent a warning letter to Nord Stream 2 pipelaying contractor Allseas asking them to stop building the Russian pipeline as soon as sanctions legislation is signed off.

“The consequences of your company continuing to do the work - for even a single day after the President signs the sanctions legislation - would expose your company to crushing and potentially fatal legal and economic sanctions,” the letter, from senators Ted Cruz and Ron Johnson, states.

13 December 2019, 12:17

US sanctions on Nord Stream 2 gas link unacceptable - German MPS

Several members of the German parliament’s energy committee have spoken out against US legislation to impose sanctions on companies involved in building the Nord Stream 2 natural gas pipeline.

Sandra Weeser, group spokesperson for the Free Democrats in the German commission for economics and energy, told ICIS: “The Trump administration is pretty clearly trying to threaten Germany. It is clear that energy security is a matter of national sovereignty, and the Americans know that very well.”

05 December 2019, 16:56

ICIS VIEW: Nord Stream 2 construction state of play

Construction is underway of the last section of the Russian pipeline. If the pipe-lay speed remains stable then Gazprom’s calculations to build the Danish section in five weeks remain valid and pipelay could be finished by the start of January.

But US sanctions could be voted in by mid-December, which would target the companies owning the vessels laying Nord Stream 2. If voted and observed, the sanctions could affect the completion of the 55 billion cubic meter (bcm) Russian pipeline.

4 November 2019, 17:14

Market more confident in Q2 2020 launch of Nord Stream 2

The TTF and GASPOOL Q2 ’20 gas contracts have shed more risk premium than the Q1 ‘20 equivalents since Russia’s Nord Stream 2 pipeline received a Danish construction permit.

This indicates that market participants are more confident in the pipeline starting deliveries from the second quarter of 2020 rather than in January as initially planned.

On 30 October, the 55bcm offshore pipeline connecting Russia to Germany received the final required permit to complete its construction in the Danish exclusive economic zone.

RECENT COVERAGE

Russia's Nord Stream 2 gets final permit, flows to start in 2020

Q2 ’20 GAS SUPPLY OUTLOOK: Nord Stream 2, Ukrainian transit and regional impact

Nord Stream 2 starts second legal dispute against the EU

Nord Stream 2 AG launches EU General Court action 

EU changes could make Nord Stream 2 derogation harder 

ICIS view: Nord Stream 2 - best option to meet rising EU gas demand 

Russia’s Nord Stream 2 gas project unlikely to get derogation – experts

Nord Stream 2 requests derogation from amended EU Gas Directive 

EU changes could make Nord Stream 2 derogation harder

Final technical, legal hurdles for Nord Stream 2 resolvable 

Image caption: Connecting pipe sections above water. Source: Nord Stream 2