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The fate of Nord Stream-2 is in danger again

The Senate Committee approved a bill that could bury an almost finished gas pipeline

On July 31, the US Senate Foreign Relations Committee voted in favor of sanctions against the Russian Nord Stream-2 gas pipeline. The bill, prepared by Republican Ted Cruise and Democrat Gene Sheikhin, provides a ban on entering the United States and freezing US assets under the jurisdiction of anyone who is involved in “selling, renting, providing or assisting in the provision” of vessels for laying Russian pipelines deep in the sea 30 meters or more.

 

As Sheikhin explained, the sanctions will affect only the Swiss company Allseas Group SA and the Italian Saipem SpA, which are engaged in laying deep-sea pipes.

 

20 members of the committee voted for the initiative, only two spoke out against. Despite this, voting does not mean adoption of the bill.

 

First, not everyone in the American establishment shares this view. A week earlier, the media wrote that “Trump’s friend,” Senator Rand Paul, has secured a transfer of the sanctions vote on the committee. In a letter to colleagues, Paul pointed out that, in its current form, the document would harm not only Russia, but also US partners in Europe.

 

In particular, the bill does not clearly explain which companies may be subject to sanctions. This means that restrictions can affect not only the Swiss Allseas and the Italian Saipem, which has an office in Texas, but also companies from Austria, Germany, the Netherlands, France, and Finland.

 

The situation around Ukrainian transit is changing in favor of Russia.

Probably, after this letter, Sheikhin clarified that the sanctions would be directed only against Allseas and Saipem, and the committee voted for the project.

 

Secondly, purely technical adoption of the document is not a quick process. The preparation of the package of measures became known in May, the document was published in June, and the Senate committee voted in late July. As US lawmakers sit, the pipeline continues to be built.

 

On Wednesday, July 31, the head of the Austrian company OMV, Rainer Seele, announced that the first Nord Stream 2 gas would arrive before midnight on December 31. According to him, 70% of the pipeline has already been laid along the bottom of the sea. While the document will go through all stages of approval, and this is the vote of the entire Senate, House of Representatives and the signature of the US President, the pipes may well be laid.

 

True, there are risks. In particular, the construction is being held back by the position of the Danish authorities, who have not yet issued permission to pass the route through the Danish exclusive economic zone. If they do not do this in August, the construction deadlines may be disrupted.

 

In addition, in July, the House of Representatives committee adopted its own, even tougher version of the bill against Nord Stream-2. It provides for sanctions against pipelines ending in Germany and Turkey, that is, against the Turkish Stream.

 

If the Senate approves its bill, and the House of Representatives – its own, a conciliation commission, consisting of members of both houses, will work out the final version.

 

Konstantin Blokhin, an expert at the Center for Security Studies of the Russian Academy of Sciences, believes that Washington may well pass a sanction document. However, this is unlikely to prevent the European Union, and especially Germany, from completing the project.

 

– Rand Paul differs from most American senators and politicians in that he thinks not mainstream. He is one of the few who speaks of the need for dialogue with Russia, criticizes the US foreign policy, which leads nowhere. It was he who was at the head of the second wave of the arrival of American congressmen in Russia in August last year.

 

But upon returning to the States, Paul was subjected to incredible criticism. He is now called the “Putin agent” because he is one of the few American politicians and political scientists who is not afraid to voice a point of view that does not coincide with the main position. So his speech against the bill is not surprising, but most other senators, unfortunately, do not share this position.

 

– That is, the adoption of sanctions against Nord Stream-2 is quite realistic?

 

– Unfortunately, Rand Paul is almost single in the USA. Given the anti-Russian character of the American elite, it is highly likely that these sanctions will be used.

 

Theoretically, Trump has a veto, but he is unlikely to use it, because the veto can be overcome by two-thirds of Congress – the super-majority. And then Trump will also be presented that he defends the interests of Russia. He does not need it.

 

Moreover, the spirit of the times today is precisely the tools of geo-economic pressure – sanctions, trade wars, barriers. It is enough to look at what Washington unleashed against all states, not only its opponents, but also allies – Europe, Mexico, Canada.

 

– How do the sanctions threaten the Nord Stream-2?

 

– I think that the Americans still will not be able to slow down the Nord Stream 2, no matter how much they want it. For Germany, this is a matter of energy security and energy survival in the literal sense. If it does not finish the construction of Nord Stream 2, what are the alternatives?

 

The first is to get American liquefied gas, which is much more expensive than the Russian pipeline. And the second is to get hydrocarbons from the Middle East, for example, from Saudi Arabia, which is controlled by the same US.

 

In this scenario, Europe, and, first of all, its economic center Germany, will be in American ticks. It will be a complete dependence, not only political, but also economic. Therefore, the issue of energy diversification is so important for Germany. And his decision lies precisely in the plane of relations with Russia.

 

Gazprom has very little time left to launch the project on time.

The Americans have tried many times to hinder this cooperation. For example, they wanted to create a kind of sanitary cordon from the Baltic to the Black Sea. But it did not work out. Russia and Germany have found workarounds, resulting in Nord Stream 2, which runs across the sea. Its implementation is an economic issue, because getting Russian gas through a pipe is much cheaper. But this is also a question of the political subjectivity of Europe.

 

Rand Paul is well aware that Europe will not abandon this project. And if we continue this pressure on the EU and Germany, it will further contribute to the breakdown of Euro-Atlantic solidarity and alienate Europe from America.

 

– Will Europeans have enough political subjectivity to withstand these sanctions?

 

– This situation is not new. At the time of Reagan, the States tried to block the Friendship pipeline. But to sabotage this project did not work, although Europe was then weaker, and the threat from the Soviet Union was more serious in the eyes of Europeans.

 

In addition, so much has been invested in Nord Stream-2 that the damage from sanctions will still not reach the investment volume. The sanctions will cause some damage, but the initial investment is so large that the point of no return is overcome, the Rubicon has already been passed. Germany will not refuse the gas pipeline.

 

Leading analyst of the National Energy Security Fund, an expert at the Financial University under the Government of the Russian Federation, Igor Yushkov, also doubts that the United States will go to the toughest scenario – sanctions against pipe-laying companies here and now. But if this does happen, Nord Stream 2 may indeed be in jeopardy, and its completion may drag on for years.

 

– The question is whether Congress will accept this document at all and in what form. And if he accepts, then from what period. It is possible that they will compromise and adopt sanctions, but from January 1. By this time, Allseas will have time to lay the remaining plot.

 

In the case of immediate imposition of sanctions, another question is whether compliance with Allseas restrictions will go. This is a family-owned Swiss company, settlements between it and Gazprom are in euros, so Washington does not have much leverage over them.

 

– And if, nevertheless, the company decides not to argue with the USA and abandons the project?

 

– If we consider the most radical scenario, when the pipe-laying vessels leave, leaving the Nord Stream-2 unfinished, this will, first of all, be a colossal blow to US-European relations.

 

Europeans are determined to complete this project, and business also supports it. Everyone understands that this is the key to the reliability of gas supply. The EU is in favor of signing a transit contract with Ukraine, and for the construction of new gas pipelines, because it is important for them to pump gas there and there.

 

The disruption of Nord Stream 2 will cause enormous damage to relations between Europe and the United States, as Europeans are well aware: the fight against this gas pipeline is caused not so much by an attempt to wound Russia, but by a desire to oust it from the European gas market. Then gas prices will rise, and the Americans will be able to profitably supply their LNG there. For Europe, this will mean a decrease in competitiveness due to more expensive energy resources.

 

In making the decision, the Americans will nevertheless take into account this position of Europe. In addition, they understand that for the Russian leadership the disruption of the project will be very painful, and the answer may be the toughest.

 

– If the pipe-laying companies nevertheless leave the project, what awaits him?

 

  • Gazprom has no experience in laying pipes at great depths. He bought one ship, converted it, but there is no practice of using it. Therefore, if the pipe-laying companies really exit the project, the big question is when will Gazprom be able to finish laying the pipeline alone.

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