One of the two threads of the Nord Stream 2 gas pipeline survived the 2022 sabotage and Gazprom and the pipe’s owner, on which the US has imposed sanctions, have a year left for a reset with Russia to save the project. Its opponents have a similar time frame to finish the Russian-German pipe off – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
Delaying the collapse of Nord Stream 2
Nord Stream 2 is on the verge of bankruptcy. Even though it has been in this state for a year and a half it has not succumbed despite the Russian invasion on Ukraine. It has only one year left to delay bankruptcy and rebuild gas relations with the Russians.
Nord Stream 2 AG, registered in Zug, Switzerland, has been insolvent for almost two years due to Russia’s invasion of Ukraine and sabotage of the Nord Stream 2 gas pipeline, which it owned. It had already laid off about 100 employees and put the balance sheet under the management of the Canton Court of Zug just before the invasion. After that America imposed sanctions Nord Stream 2 AG. However, a moratorium on declaring bankruptcy was announced on January 10, 2022 for six months and later extended.
According to the Luzerner Zeitung, the moratorium on the bankruptcy of Nord Stream 2 AG can last 2 years tops. It is currently valid until July 10, 2024 and can be extended until January 10, 2025. Therefore, Nord Stream 2 AG, which is completely owned by Gazprom, has one more year to recover or it will face a downfall. Meanwhile, the sabotaged Nord Stream 2 pipeline has one workable thread, but environmental organizations warn that rusting at the bottom poses a threat to the environment. Therefore, dismantling the pipe is on the table.
The administrator of the Nord Stream 2 case is a company called Transliq, which has assured in an interview with the Luzerner Zeitung that it has taken into account the challenge described by this newspaper. It does not disclose the sources of financing for the current expenses of Nord Stream 2 AG, but journalists suspect that part of the money comes from Gazprom. Some of the project’s financial partners in Europe have already written off their losses.
The sabotage of Nord Stream 1 and 2 on September 26, 2022, led to the destruction of both threads of the first pipe and thread A of the second. The Russians believe that they could make it work. Such a suggestion came even from President Vladimir Putin. So far, there has been no agreement in the West. The companies were not ready to bear further costs associated with making Nord Stream 2 operational, and politicians were not officially interested in returning to Gazprom.
Playing for a reset
However, one can imagine a situation in which the conflict in Ukraine freezes and gas relations with Russia are back, at least for come of Gazprom’s clients that still have long-term agreements. There will be a temptation to return to them and get the fuel via the surviving thread of Nord Stream 2. This temptation may at minimum lead to the return of the European-American disputes over sanctions against Nord Stream 2, known from the past and in line with the Kremlin’s policy of pushing Americans out of Europe. So the Russians have one more year to fight for such a reset, and their opponents in the West-to block it if they do not want the contentious pipe to come back to life.