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Polish Briefing 2 October, 2018 9:00 am   
Editorial staff

Polish Briefing: Nord Stream 2 is not afraid of US sanctions, but is waiting for Denmark


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What goes on in Poland on the 2nd of October.

Nord Stream 2 is not afraid of US sanctions, but is waiting for Denmark

The Americans have still not decided whether to impose sanctions on Nord Stream 2 financial partners. As they informed on Friday 28 September, financing the disputed gas pipeline is not in jeopardy. However, they are still waiting for Denmark’s decision to build on its territory.

Financing Nord Stream 2

Chief Financial Director of Nord Stream 2 AG Paul Corcoran said on Friday that five European companies that are financial partners of the project declare to maintain their full commitment. By September 2018, Gazprom had provided 2,6 billion in loans and own contribution, as did financial investors in Europe – Engie, OMV, Shell, E.on/Uniper and BASF/Wintershall. Together, it gave 5,2 billion euros, or about 55 percent of the project’s costs, originally estimated at 9,5 billion euros.

US sanctions

Last year, the US Senate gave the US president the right to introduce sanctions against partners of Russian energy projects like Nord Stream 2. President Donald Trump, despite strong criticism of the project, did not decide to introduce them. Peter Beyer, responsible for the transatlantic relations of the German government, told the Bloomberg agency that his sources convince that the US will ultimately introduce sanctions against Nord Stream 2 financial partners. This could happen in his opinion just before the Senate elections in November this year or on early next year.

Meanwhile, Corcoran said that probably in the first half of 2019 external financing will be organized up to 70 percent of this year’s construction costs. In his opinion, even if American sanctions are introduced, they will not cover Nord Stream 2 financing by European partners, because agreement on it was concluded in April 2017, before the adoption of the said regulations by the US Senate.

Denmark’s decision

It is not known whether the project is delayed and whether the cost estimates will be revised. It is possible to revise the route taking into account the section avoiding the territorial waters of Denmark, which still has not consented to leading the gas pipeline from Russia to Germany. Nord Stream 2 AG has applied for an alternative route through the exclusive territorial zone of Denmark north of Bornholm. Copenhagen has not yet come to the conclusion.

According to Corcoran, Denmark’s disagreement up to the middle of next year will not hinder the implementation of the project until the end of 2019 as planned. – We have a pipe-laying plan and according to it, the Danish section will be laid in the second half of 2019. The construction of the Danish section is to take about two months – revealed the manager. He did not say what would happen if the Danes did not give their consent after this date. According to information published by BiznesAlert.pl, Nord Stream 2 may be delayed by six to twelve months.