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GAS Nord Stream 2 8 May, 2018 10:00 am   

Nord Stream 2 delay on the horizon

A representative of Gazprom informs that the pouring of concrete for the foundations of the gas collection point from the Nord Stream 2 gas pipeline in Germany has begun. This does not mean, however, that the construction of the gas pipeline has started on German territory. The supporters of the project want to convince us that the matter is sealed, but it is more and more likely that it will be delayed, writes Wojciech Jakóbik, the editor-in-chief of BiznesAlert.pl.

The Nord Stream 2 message as fact

The German DPA press agency, citing Gazprom’s representative, announced that excavations and laying foundations for the construction of a terminal for receiving Russian gas, which is to flow through the Nord Stream 2 gas pipeline, have begun in Lubmin. The works are carried out in an area of ​​6 hectares, according to Informacyjna Agencja Radiowa (IAR). He emphasizes that although Russian Gazprom has full approvals in Germany, Finland and Russia, it has not yet received them in other countries: Sweden and Denmark.

What is interesting is the fact that the first communiqué on “the start of the construction of the German section of the Nord Stream 2” appeared in the Russian-language version of Deutsche Welle. This is where the interview of the German press agency was quoted with the representative of the consortium responsible for the project, the transmission of which was presented as a fact in later echoes of this information in IAR and the Ukrainian agency UNIAN.

Who counts on the walkover?

As I wrote in the past, the possible start of the construction of Nord Stream 2 in Germany will have an impact on the discussion about regulations that may cover it. It is about the revision of the Gas Directive proposed by the European Commission, which will be the subject of the work of the Council of the European Union. It could lead to a change in assumptions, and therefore also to project delays. Gazprom’s statement may serve as an argument that the investment has already begun and can not be subordinated to the new law. In reality, however, not a single section of the gas pipeline has yet been located on German territory. The discussion about the definition of the started investment will continue.

The game is still going on, although the initiators of the disputed project are interested in convincing us to give the game a walkover. It is worrying that the marketing message of the company responsible for Nord Stream 2 hit the media headlines. There are a number of arguments against this venture, which is to ensure the possibility of delivering to 55 billion cubic meters of gas per year from Russia to Germany. These are political, economic, legal and security reasons. They may serve, perhaps not to block, but at least to delay the investment. They can already announce the consortium’s messages if they are properly read. The Nord Stream 2 message conveyed as a fact may demolish project critics and give arguments to its defenders in the Council of the European Union.

From my information, it appears that the work on the gas directive is aimed at maintaining the right of the European Commission to exempt investments like Nord Stream 2 from antitrust law, but only on the condition that it is justified by energy security reasons. Meanwhile, the Commission officially recognizes that the gas pipeline at issue will not serve energy security or the development of the European Union market. Therefore, there is no support and probably in the light of new regulations could not be excluded from EU law. In addition, as I wrote in March 2017, the possible implementation of the new law against Nord Stream 2 would have to be preceded by the EC-Russia negotiations, which may further delay the implementation of the disputed undertaking.

Nord Stream 2 delay on the horizon

Although the schedule for the construction of the disputed gas pipeline assumes that it will be put into service by the end of 2019, unforeseen difficulties may delay the project. The interlocutor of the German news agency admits that in the absence of Denmark’s consent to the location of the section in its territorial waters, the Nord Stream 2 consortium is preparing an alternative route bypassing Danish waters. If it prepares, it means that it is not yet available, which in turn may mean that it is possible to delay construction. It is worth noting once again that the Americans have still not imposed sanctions against Nord Stream 2, but their threat still has a negative impact on the profitability of the project and may increase its costs.

However, one should not take too much of a rhetorical change in Germany. Chancellor Angela Merkel admitted that Nord Stream 2 “has a political dimension”, which she has not done before. This may indicate a growing caution in Berlin in the light of increasing criticism of the project, but probably does not announce a change of position. Germany still opts for the construction of Nord Stream 2 after guaranteeing a “minimum” level of supply through Ukraine. As I wrote in the past, possible negotiations on transit through the Ukrainian territory could potentially affect the schedule of the construction of the gas pipeline.



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