FRANKFURT, GERMANY (AP) – German Chancellor Olaf Scholz has suspended the certification process for the Nord Stream 2 natural gas pipeline after Russia recognised separatist-held regions in eastern Ukraine, with the West fearing a full-scale invasion is next.
The undersea pipeline directly links Russian gas to Europe via Germany and is complete but not yet operating. It has become a major target as Western governments try to exert leverage on Russia to deter further military moves against its neighbour.
Here are key things to understand about the pipeline:
WHAT IS NORD STREAM 2?
It’s a 1,230-kilometre-long natural gas pipeline under the Baltic Sea, running from Russia to Germany’s Baltic coast.
It runs parallel to an earlier Nord Stream pipeline and would double its capacity, to 110 billion cubic metres of gas a year. It means Gazprom can send gas to Europe’s pipeline system without using existing pipelines running through Ukraine and Poland.
The pipeline has been filled with gas but had been awaiting approval by Germany and the European Commission.
HOW IS SCHOLZ BLOCKING THE PIPELINE?
Germany’s utility regulator was reviewing the pipeline for compliance with European regulations on fair competition. It’s that approval process that Scholz said yesterday that he was suspending.
Germany was required to submit a report on how the pipeline would affect energy security, and Scholz said that report was being withdrawn.
WHY IS SCHOLZ TAKING ACTION NOW?
Scholz, who took the helm in Germany in December, backed the project as finance minister for his predecessor, Angela Merkel, and his Social Democratic Party supported it.
As Russia massed troops near Ukraine’s border, Scholz avoided referring to Nord Stream 2 specifically even as United States (US) officials said it would not move forward if Russia invaded.
But Scholz warned that Russia would face “severe consequences” and that sanctions must be ready ahead of time. Germany had earlier agreed with the US to act against Nord Stream 2 if Russia used gas as a weapon or attacked Ukraine.
The chancellor said yesterday that Russia recognising the independence of rebel-held areas in Ukraine marked a “serious break of international law” and that it was necessary to “send a clear signal to Moscow that such actions won’t remain without consequences.”
WHY DOES RUSSIA WANT THE PIPELINE?
State-owned gas giant Gazprom says it will meet Europe’s growing need for affordable natural gas and complement existing pipelines through Belarus and Ukraine.
Nord Stream 2 would offer an alternative to Ukraine’s aging system that Gazprom says needs refurbishment, lower costs by saving transit fees paid to Ukraine, and avoid episodes like brief 2006 and 2009 gas cutoffs over price and payment disputes between Russia and Ukraine.
Europe is a key market for Gazprom, whose sales support the Russian government budget.
Europe needs gas because it’s replacing decommissioned coal and nuclear plants before renewable energy sources such as wind and solar are sufficiently built up.
WHY IS THE US AGAINST NORD STREAM 2?
The White House was in “close consultations with Germany” and welcomed their announcement, press secretary Jen Psaki tweeted. She added that the Biden administration followed with its own measures yesterday.
The US, European NATO allies such as Poland, and Ukraine have opposed the project going back before the Biden administration, saying it increases Europe’s dependence on Russian gas and gives Russia the possibility of using gas as a geopolitical weapon. Europe imports most of its gas and gets roughly 40 per cent of its supply from Russia.
