LONDON (ICIS)--New 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), said on Monday.
The Association also recently wrote to the speaker of the US House of Representatives Nancy Pelosi and other US democrats to ask them to stop work on new sanctions against EU companies involved in the pipeline project.
Nord Stream 2 is an offshore pipeline connecting Russia to Germany. Once finished, it will double Russia’s direct pipeline export capacity to the EU to 110 billion cubic meters (bcm) per year. This is 55% of what Russian state-owned gas producer Gazprom sent to Europe in 2018 and 2019 and intends to keep sending until 2030. Gazprom owns the €9.5bn project and financed half of it, while the other half of the funds was provided by French Engie, Austrian OMV, Dutch Shell, and German Uniper and Wintershall.
The German Eastern Business Association promotes the interests of the German economy in 29 countries and is sponsored by the Federation of German Industries, the Association of German Banks, and the Association of German Chambers of Commerce and Industry among others. The Association supports projects and claims of German companies.
Some of Nord Stream 2’s investors are members of the Association : German Uniper and Wintershall and Gazprom via its subsidiary Gazprom Germania.
Hermes called the extraterritorial US sanctions against the EU participants of Nord Stream 2 “an inadmissible interference with international law” and underlined that this past summer 24 of the 27 EU member states protested in a joint demarche against this interference.
Despite the incoming Biden administration giving hope for the resumption of US-EU dialogue on this issue, there is a risk that the outgoing Trump administration, in its last two months, votes new sanctions at the expense of Europeans, according to Hermes. These new sanctions would be in force during the start of the new Biden administration and so, according to Hermes, would weigh on the new US-EU talks.
GERMANY TO THE US
Taking into account US arguments against Nord Stream 2, Germany has lobbied for a new gas transit agreement with Ukraine, is working hard to improve its LNG import possibilities and guarantees Nord Stream 2 will operate under EU regulation, the Association underlines in the letter.
In its role of financial investor of Nord Stream 2, Wintershall is not affected by US sanctions, Wintershall CEO Mario Mehren said in a company conference call on Monday. Mehren also said he was confident that the project will be built and that this infrastructure is important for European security of supply.