US and Ukraine lost battle for Nord Stream 2.
May 20, 2021.
The United States has abandoned sanctions against Nord Stream 2, which could put an end to the project. Russia and Gazprom can celebrate the victory - the gas pipeline in the Baltic Sea will not only be completed, but also put into operation. In terms of time, this can be done by November, that is, by the beginning of the new heating season. Why did Washington dutifully leave the battlefield and will not help Ukraine in any way?
The situation around Nord Stream 2 has escalated to the limit. On the eve of the publication Axios, citing its sources, reported that the Biden administration plans to impose new sanctions on the gas pipeline. In addition to the vessels and their owners, the pipeline operator Nord Stream 2 AG and its manager Matthias Warnig will also be subject to sanctions. This is a clear step towards new tough sanctions that would put an end to the supply of Russian gas through this pipeline. However, the United States played back. Washington decided to partially suspend their implementation, guided by the national interests of the United States. And on Thursday night, US Secretary of State Anthony Blinken officially confirmed this information.
According to him, the State Department has submitted a report to Congress in accordance with the amendments to the European Energy Security Act (PEESA) to impose sanctions against four ships, five organizations and one individual that are involved in the construction of the Nord Stream 2 pipeline, including Nord Stream 2 AG and CEO Matthias Warnig. However, in the national interests of the United States, it was decided "to suspend the implementation of sanctions against Nord Stream 2 AG, its head Matthias Warnig and corporate employees of Nord Stream 2 AG." This statement was circulated on Thursday night during a meeting between Blinken and Russian Foreign Minister Sergei Lavrov.
As a result, four vessels remained on the black list - the Akademik Chersky and the supply vessel Baltic Researcher, as well as the icebreaking vessels Vladislav Strizhov and Yuri Topchev, which are helping to complete the construction of Nord Stream 2. Plus, nine additional vessels that are controlled or owned by the FSBI "Marine Rescue Service" (Marine Rescue Service) fall under the sanctions. This company was also included in the black list, together with the companies Koksokhimtrans, Mortransservice and Samara Heat and Power Property Fund (STIF). The latter became the owner of Akademik Chersky after it became clear that this vessel would inevitably fall under US sanctions due to the construction of a gas pipeline in the Baltic Sea off the coast of Denmark.
The exclusion of Nord Stream 2 AG and its top managers from the sanctions list is a landmark decision. This allows us to assert that Nord Stream 2 will not only be completed, but, more importantly, the Americans will not interfere with putting the pipeline into operation.
The fact is that the inclusion of ships and their owners in the blacklist does not pose a danger: measures against them were expected. All this is a direct consequence of the sanctions imposed back in December 2019. It's just that every time Americans specify specific names of companies and people. As soon as Fortuna began to complete the construction of the Danish section of the gas pipeline, it immediately fell under sanctions. Now it's Akademik Chersky's turn, who came to the rescue later. Punishment also threatens supply vessels that tow pipe-laying vessels, deliver pipes, etc.
“However, the blacklisting of Fortuna did not lead to changes in her work. Fortuna continues to build. And the vessels on the new list will also continue to work, ”said Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, an expert at the National Energy Security Fund.
Russia was ready for this, so it changed the owners of the ships for those companies that you would not mind putting into the American meat grinder. For example, the same Gazprom Flot, which originally owned the ship, was removed from the ranks of Akademik Chersky's owners.
An important point is that the United States does not propose to extend sanctions to the entire chain of owners who are blacklisted ships. Otherwise, Gazprom Flot and then the parent company, Gazprom itself, would be under the threat of sanctions.
“The change of ownership or the transfer of the vessel to rent or lease could be seen by the United States as an attempt to circumvent the sanctions. However, according to the preliminary list of companies, we see that Gazprom Flot was not included in it. Gazprom's strategy worked: he hid his structures from sanctions. The Americans are not digging in this direction. This is already a positive signal, ”says Yushkov.
The fact is that such investigations could lead to serious consequences. “If the United States went through the chain of owners to Gazprom, they would have driven the Europeans into a corner. After all, then buying any gas from Gazprom would be a violation of the sanctions. But Europe cannot refuse to buy Russian fuel altogether, this is unrealistic. Therefore, European companies would still conduct operations with Gazprom, for which the Americans would have to punish them. The Americans do not want to get to Gazprom, but not because of Gazprom or Russia, but because of the Europeans, ”Yushkov explains.
The lifting of sanctions against the operator of the Nord Stream 2 AG gas pipeline and its head Matthias Warnig is from the same sphere. The United States does not want to worsen relations with Europe, which is why Gazprom and Russia are winning.
“When the United States says that lifting the sanctions is in its national interests, it means that the result of these sanctions - the deterioration of relations with Europe - is not in the interests of the States,” Yushkov said.
What does the inclusion of Nord Stream 2 in the sanctions list mean? That neither European companies, nor European government agencies will even be able to exchange documents with the Nord Stream 2 operator.
“When the pipeline operator brings the German regulator all the necessary documents to obtain permission to commission the constructed Nord Stream 2, the regulator will face a difficult choice. Within the framework of German law, he is obliged to accept these documents and issue a permit. But then the German regulator will violate US sanctions. If, on the contrary, it fulfills the American sanctions, then it will violate its own European laws. The Americans de facto now admit that they have decided not to put Europe in such a difficult position of choosing between a rock and a hard place, ”says the FNEB expert.
The bottom line is that the current sanctions related to the construction process do not interfere with the construction itself. "Fortuna" is now building a kilometer a day, "Akademik Chersky" - half a kilometer a day. The work is already at the home stretch. And the risks that the Americans will interfere with the commissioning of the already completed gas pipeline have finally dissipated. Two problems of Nord Stream 2 have been de facto resolved. Most likely, there will be no problems for the commissioning of a half-capacity gas pipeline. Yushkov expects that by November the first gas will be supplied to Germany via the pipeline.
Gazprom will have to solve the problem of the pipe operation not at full capacity of 55 billion cubic meters of gas per year, but only by 50%. This is the requirement of the norms of the EU Third Energy Package for the offshore section, introduced by the EC specifically for Nord Stream 2.
The Americans will direct all their efforts to prevent Gazprom from filling its own pipeline completely. To this end, the United States is using its European partner, Poland, which will continue to obstruct Gazprom's attempts to reclaim the entire pipeline in every possible way.
“It will be very difficult to get permission for one hundred percent loading of Nord Stream 2. The Opal pipeline has not been able to achieve this for years. Therefore, it is possible that Gazprom will transfer ownership of half of the gas at the bottom of the sea. This is one of the scenarios ", says the expert of the National Economic Security Fund.
It is curious that in Europe the demand for Russian gas is very high, although this is not typical for May, and prices jumped to $ 350 per thousand cubic meters. At the same time, Gazprom, according to Yushkov, deliberately fulfills not all orders of the Europeans, which go in excess of the contractual volumes. Such a trick is needed, firstly, not to pump excess volumes through Ukraine. And it's not only about politics, but also about money - Gazprom has to pay higher tariffs in case of excess supplies through the Ukrainian pipe. Secondly, Gazprom is clearly hinting to Europe to live in harmony, and that it is possible to receive additional volumes of gas via Nord Stream 2. The uncharacteristically high demand for gas in Europe is now due to a longer and frosty winter than usual. Underground gas storage facilities are depleted as never before, and now the Europeans want to fill them.
In any case, the news on Nord Stream 2 is not happy for Ukraine. Gazprom will gradually stop financing Ukraine. “The launch of the Russian pipeline will allow gas to be supplied to Europe bypassing Ukraine. At the same time, its losses from the transit of Russian gas to Europe will be quite tangible. According to the Ukrainian side, at the end of 2020, Ukraine's profit from gas transit amounted to $ 13 billion, ”notes Oleg Kalenov, Associate Professor at the Department of Industrial Economics, PRUE. Plekhanov.
According to Sergei Makogon, head of the Ukrainian GTS Operator, the Ukrainian economy will lose $ 5-6 billion a year if Nord Stream 2 is launched. This includes $ 1.5 billion in transit revenues, as well as $ 2–3 billion in revenue from an automatic increase in the price of gas for Ukraine itself by $ 50 per thousand cubic meters, since the price of gas transportation from Germany will be higher. Plus, the cost of exporting fertilizers will rise and gas prices for the population will rise. Finally, without transit, the EU's interest in Ukraine will decrease significantly. However, as soon as Ukraine finds itself without transit, which means without the ability to put pressure on Russia, the US's interest in it will dry up. Without the ability to annoy Russia, the Americans are unlikely to need Ukraine.
Text: Olga Samofalova