Polish Briefing 28 May, 2019 9:00 am   
Editorial staff

Polish Briefing: Russia take the delay of Nord Stream 2 into account

What goes on in Poland on the 28th of May.

The Russians take into account the delay of Nord Stream 2, but they are not afraid of US sanctions

Russian media admit that the delay of Nord Stream 2 is possible, but deprecate the importance of the threat of US sanctions. The bill proposed by American senators in the middle of May provides for the prohibition of construction the Nord Stream 2 gas pipeline by foreign ships at a depth below 30 m below sea level. In practice, it could cover the entire route of the controversial project, which is already completed in about 53 percent.

On May 14, American senators Ted Cruz, John Barrasso, Tom Cotton and Jeanne Shaheen presented the Senate with a draft law “On the protection of Europe’s energy security in 2019”. A week later, during a visit to Kiev, US Secretary of Energy Rick Perry suggested that Congress would submit a similar project to the president’s signature soon.

The document proposed by the senators was analyzed by the RBK website. It enables to cover with sanctions all entities such as vessels used to build the Nord Stream 2 gas pipeline. Limitations would apply if the pipeline was constructed at a depth of more than 30 meters. The bill even provides freezing of assets and operations of non-compliant companies in the United States. In addition, the management of such companies and their major shareholders would be prohibited from entering the US. The Americans could also impose sanctions on ship insurers used to build Nord Stream 2.

The RBK daily admits that at the current rate of pipes assembling, the gas pipeline will be completed between the end of 2019 and the beginning of 2020. The Nord Stream 2 AG documents described by contain the assumption that the construction will be completed by mid-2020, i.e. later than initially planned. Initially, NS2 AG, wholly owned by Gazprom, wanted to complete construction by the end of this year.

RBK is watching the announcement of US Secretary of Energy Rick Perry, who said that President Donald Trump will soon sign a law on sanctions against Nord Stream 2. Newspaper analysts argue that it is not clear which project submitted in the Senate it concerns. However, if the law would include project builders, then finding an alternative entity “will be a matter of time and money” – as analysts from Vygon Consulting say. US sanctions could therefore be associated with a further delay and increase in project costs.

In practice, 90 per cent of the entire Nord Stream 2 pipeline would be subject to restrictions. According to RBK, US senators deliberately set census 30 m knowing that a significant part of the work is carried out at a greater depth. Representatives of Nord Stream 2 AG, i.e. a company building a gas pipeline, say that construction is carried out on average of 50 m under the sea level, and in the deepest place on 200 m, while in the shallowest on 5 m.

Under the proposed provisions, each entity would have to cease providing services when the law is adopted. Currently, the Nord Stream 2 stacking vessels are delivered by Swiss Allseas, Italian Saipem and Russian MRTS.

Meanwhile, the US has not yet decided on this matter. Numerous draft sanctions against Russia mentioning in the content of Nord Stream 2 are waiting for the signature of the president.