What do we think of the Nord Stream 2 gas pipeline project in Russia, Germany and Poland

The Nord Stream 2 gas pipeline project aims to connect Russia with Germany via the Baltic Sea (November 5, 2020);. & Nbsp;
The Nord Stream 2 gas pipeline project aims to connect Russia to Germany via the Baltic Sea (November 5, 2020). (JENS BUTTNER / DPA-ZENTRALBILD)

Clément Beaune, Secretary of State for European Affairs, explained Monday February 1 that France was in favor of abandoning the Nord Stream 2 gas pipeline project, while pro-Navalny protests are widely repressed in Russia. This gas pipeline, mainly owned by the Russian giant Gazprom, is to link Russia to Germany via the Baltic Sea. Direction Russia, Germany and Poland to see how the French declaration is perceived.

A major stake for Russia

In Russia, the official position remains to do everything to complete the laying of the gas pipeline. Despite the latest withdrawals to date (Swiss insurers and Norwegian certifiers) the Kremlin and Gazprom say they are ready to ignore American and European pressures. Still, the Russians were forced to consider the very negative assumption that the NordStream 2 project would not go through with it.

The accounts are quickly made in the Kremlin. Russia, where more than 80% of gas exports go to Europe, would initially lose substantial cash inflows. When we know that, for now, the simple cost of NordStream 2 is estimated at nearly 10 billion euros. Gazprom will also have to reimburse part of its Western partners, foremost among which is Engie. In this regard, two weeks ago, Alexei Miller, the all-powerful boss of Gazprom, originally, like Vladimir Putin, from Saint-Petersburg, was received at the Kremlin after hinting in an official statement, that in the event that NordStream 2 did not happen, Gazprom would simply take its time to reimburse its European partners.

The shortfall if NordStream 2 is not realized, also risks mitigating the famous “soft power” of the Kremlin which relies to a large extent on its exports of hydrocarbons. Lhe gas exports in general, and NordStream 2 in particular, are an important lever for Russia in its strategy of influence abroad. If the project disappears, Americans will be delighted because they are already ready to sell their shale gas in Europe. It would above all be a snub for the Kremlin vis-à-vis the Poles and especially the Ukrainians. Not so much for the billions of euros that Warsaw and Kiev will continue to pocket in right of way on their territory concerning the “old” Yamal gas pipeline which still supplies part of Europe today, but above all because the Kremlin would obviously lose a means of pressure on its two neighbors.

Germany continues to defend the project

In the country, however, doubts are growing. The intervention Monday February 1st of Clément Beaune is also for something. So far, the daily Tagesspiegel recalls, Berlin has not taken seriously any foreign criticism against the project. Neither those of the Poles and the Baltics, seen as proof of the primary anti-Russian positions in Eastern Europe. Neither those of the United States equated with another slippage of the Trump administration. Nor those of the European Parliament which had voted 581 votes against the project. The position taken by Paris, which directly links this gas pipeline project to the fate of Navalny, weakens the German position. Berlin sees Nord Stream as a purely economic project.

The project faces many obstacles on all fronts. It is not certain that it will see the light of day. We are a few months away from the elections. The Greens could become the CDU’s next partner in government. They are staunchly opposed to Putin’s pipeline as they call the pipeline. Above all, the Biden administration is just as opposed to the project as the Trump administration was. Reason enough for many companies involved in the project not to want to resume work frozen for months.

A highly criticized project in Poland

In Poland, the Polish Foreign Minister stressed the importance of the French position, and admitted that the Navalny affair had created a stir in Europe on the subject of the gas pipeline. But Zbigniew Rau believes that unfortunately the German position today has not changed, and that Germany continues to support this project. LPoland is a fierce opponent of the Nord Stream 2 pipeline. We remember the words of the Polish Prime Minister in a German daily: “it makes the European ship dependent on the Russian gas supply, and this, by providing for financial contributions to the Russian oligarchs ”. In short, this will only strengthen Moscow’s already dominant position on the gas market in Europe.

Poland is already dependent on Russian gas for more than half of its consumption. Warsaw is trying to fight this dependence as long as Nord Stream 2 does not have to pass through Poland, and the price of gas could therefore increase for Polish consumers. The country has therefore been working for several years to diversify its supplies, focusing in particular on Norway and the United States. A terminal to receive liquefied natural gas has been built, a gas pipeline is being built to link Norway to Poland. It should be operational in 2022. A diversification that has allowed Warsaw to announce that it will end its gas contract with Gazprom, the Russian company, after 2022.

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