Gazprom Calls Washington’s Bluff on Nord Stream 2 Sanctions

America's Ambassador to Germany who thinks he's a viceroy is promising sanctions vs Gazprom

 

When the US imposed sanctions in December banning external contractors from working on Russia’s Nord Stream 2 gas pipeline to Germany, Washington hoped it had finally killed the controversial project stone dead.

It was wrong. Gazprom, the Kremlin-controlled gas giant behind the project, called Washington’s bluff. By vowing to complete the pipeline by itself, it has presented an ultimatum the US has long sought to avoid: if you want to stop the pipeline, you need to place sanctions on us. [Presumably, it is the secondary sanctions on dealing with Gazprom that would (maybe) do it.]

That is a gamble with potentially enormous consequences. Not only does Gazprom supply almost 40 per cent of Europe’s gas, it has also raised €4.75bn to pay for Nord Stream 2 from European energy companies Shell, Engie, OMW, Uniper and Wintershall.

Since it was announced in 2015, Nord Stream 2 has been mired in geopolitics, pitting Russia against the US and dividing the EU.

The pipeline would double the amount of gas piped directly from Russia to Germany and reduce the amount pumped through Soviet-era pipelines in Ukraine. As such, it has become a lightning rod for critics of Moscow who say Gazprom is seeking both to increase Europe’s dependence on Russian supplies and hurt Kyiv by depriving it of hefty transit fees.

The project weathered years of critical rhetoric, legal challenges and reluctance from Baltic countries whose permission was required to begin construction. Then US sanctions forced Swiss pipe-laying company Allseas to sail away from the project five months ago with 94 per cent of it completed, and just 160km of pipe left to lay on the bottom of the Baltic Sea.

Gazprom now says it will bridge that gap — in Danish territorial waters — alone and get the pipeline ready to start operations in spring 2021.

Whether it can actually do that looks set to depend on the Akademik Cherskiy, a pipe-layer that has spent most of the past three months sailing halfway around the planet.

The ship left Russia’s Pacific coast close to Japan in February to begin a roughly 20,000 nautical mile journey to northern Germany, taking the long way around Africa to avoid the Suez Canal.

But the Akademik Cherskiy is not a like-for-like replacement for the far superior craft used by Allseas. The vessel was purchased in 2016 by Gazprom as a last resort if US sanctions — first imposed in 2014 after Moscow’s annexation of Crimea — were extended to block its use of foreign contractors.

It represents an insurance policy the company hoped it would never have to use. Even with significant upgrades since it was bought, some experts question its ability to get the job done.

“We are forced to look for new solutions to lay the remaining 6 per cent of our pipeline,” Nord Stream 2 spokesman Jens Mueller said in a statement. “Nord Stream 2 as well as the companies supporting our project are convinced that the soonest possible commissioning of the pipeline is in the interest of Europe’s energy security [and] EU consumers.”

“I don’t think that the project can be stopped,” Russia’s foreign minister Sergei Lavrov said last week.

Some US officials appear to think otherwise. Richard Grenell, the US ambassador to Germany, said this week that Washington planned to impose new sanctions. US Senator Ted Cruz said this month that President Donald Trump would level sanctions against Gazprom if it completed the pipeline.

“The sanctions on Nord Stream 2 were endorsed by the entire US government and there is absolutely no wriggle room,” Mr Cruz said. “If Gazprom uses the Akademik Cherskiy to finish the Nord Stream 2 pipeline, [the president] must and will impose crippling sanctions on Gazprom.”

That would mark a significant escalation in the six-year sanctions campaign against Moscow. The US has long resisted similar sanctions against Rosneft, Gazprom’s oil-producing equivalent, fearing the knock-on impact on the global crude market.

The EU and Germany have condemned Washington’s December sanctions as an unfair imposition on the bloc’s energy policy, and would be thrown into crisis by any moves to level sanctions against its most important gas supplier.

Gazprom now appears to be gambling on its belief that the US would not go that far.

The Akademik Cherskiy is currently berthed in the German port of Mukran, where Nord Stream 2’s logistics base is located. If it soon sets sail for Danish waters loaded with pipes, the ball will be firmly back in Washington’s court.

Source: Financial Times

26 Comments
  1. cechas vodobenikov says

    Galtung describes the amerikan subconscious as “manichean, dualist, barbarbric”….as Slater wrote, “Am icans have always been genocidal, enjoying killing from afar”. Reuters/IPSOS (not amerikan) found the ONLY 15% of the US public believes torture is never justified—2/3 fully support the use of torture….until these under socialized primitive cretins lose their empire, they will continue these desperate measures—expected from a backward people unable to compete

  2. Ralph London says

    So the satanic, shit stirring usg doesn’t care WHOM they damage, including its own ‘allies’. Well FUCK YOU yankee Govt, you even turn your friends away from you. Time to boycott yank goods – and in particular the shit $ – until good Americans get their country back and install a good Government.

    1. Josep says

      Time to boycott yank goods

      Maybe then we can see an exodus away from Microsoft Windows in favor of Linux. This can also lead to non-American techies ditching the Intel brand, if not the x86 architecture, in favor of some other (read: non-American) manufacturer of CPUs. Microsoft gets away with anti-competitive behavior (remember DR-DOS, WordPerfect and BeOS?) and is somehow allowed to have a monopoly on the operating system market. The result is that the actions of a single company in a single location affect 90% of desktop computers in the entire world.

      It is also important to make note of non-American companies that are owned by American conglomerates. Norwegian chocolatier Freia, for instance, is owned by Mondelez International.

      and in particular the shit $

      One thing I never understood was why US dollar bills have to be printed in the same color and size, when the banknotes of every other country are color-coded (e.g. euros, francs, pounds, yuan and rubles). Frankly, having only one color makes it difficult to tell one denomination from another. This also has the unfortunate side-effect of Americans calling said currencies “Monopoly money”. Ah well, all the more reason for ditching the petrodollar.

      1. Ralph London says

        I did read about why the $ was the same colour etc for all denominations but that was a long time ago, and I can’t – actually don’t want to – remember why.
        I’ve tried Linux, but not switching to it yet.
        Interesting that m$ was able to push aside ibm’s os/2.
        However, have you ever wondered why m$ didn’t fight google much harder regarding the search engine? How m$ was so pathetic they couldn’t even get past yahoo into 2nd place…it’s almost as if they were TOLD NOT to compete with google…

        1. Josep says

          I did read about why the $ was the same colour etc for all denominations but that was a long time ago, and I can’t – actually don’t want to – remember why.

          I don’t blame you for that. Even if the rationale is murky, it is one of the many flaws of the US dollar that to some degree are absent in some of the other currencies I mentioned above. Some of these might not affect other peoples’ lives, so YMMV on them.
          * Pennies are minted in copper-plated zinc, which damages the stomach lining when swallowed. Nothing sells for a penny anymore anyways, so it makes no sense for them to still be minted today.
          * Half-dollar and one-dollar coins are still scarce. What once sold for a quarter decades ago would cost one dollar today. This says something when you factor in the cost of living and GDP per capita.
          * For some world reserve currency, the dollar’s coin denominations still have their values written in English instead of Arabic numerals. In other words, you’d have to learn English just to read the labels.
          * The dollar sign (a “snake with a vertical line [or two] through it”) is shaped like an S, and ‘dollar’ doesn’t begin with an S. The origins are murky and not as straightforward as e.g. the pound sign (£, ‘libra’).

          It is alleged that the first two aspects on the list are this way because any changes in the status quo would be an open admission that the US dollar has lost its value over the decades and lead to lower trust in it. Couple this with American exceptionalism, and many Americans are kept in the dark about inflation, making little to no impetus to catch up with the times; it’s as if they can pretend the monetary system can remain unchanged for generations, even as obvious signs appear (e.g. paying parking meters with stacks of quarters).

          Interesting that m$ was able to push aside ibm’s os/2.

          I don’t think I mentioned OS/2, although that’s not a bad example.

          However, have you ever wondered why m$ didn’t fight google much harder regarding the search engine? How m$ was so pathetic they couldn’t even get past yahoo into 2nd place…it’s almost as if they were TOLD NOT to compete with google…

          I have not looked into Bing’s relatively low market share, let alone any policies prohibiting competition. My guess is that Google and Yahoo have been entrenched into public consciousness at least a decade before Bing came out. Search engines aren’t really as dependent on operating system as much as office software.

          1. joey n says

            The dollar sign (a “snake with a vertical line [or two] through it”) is shaped like an S, and ‘dollar’ doesn’t begin with an S.

            I’ve seen multiple theories explaining the dollar sign being shaped the way it is.
            https://www.straightdope.com/columns/read/724/what-does-the-s-in-the-dollar-sign-represent/
            One theory states that the dollar sign is really an abbreviation for pesos, ergo it’s actually a peso sign. In handwriting, ‘pesos’ was abbreviated as “PS”. As time went on, the P and S were combined together and became what we now know as the dollar sign. With the exception of the Philippine peso, the symbol eventually became the symbol for various dollar- and peso-denominated currencies, not just the US dollar.

            However eye-opening this is, it should not detract attention from the corruption of the US dollar and the Federal Reserve.

          2. Ralph London says

            About bing & google, it was so obvious that google was up and coming and m$ didn’t take on google to snuff it out, as it were, like they did to other competition.
            The $ as a snake is appropriate, or $ for satanic, with the one eye & pyramid on the $ bill – see vigilantcitizen.com for the former, the proof of evil is so layered or stacked up that it is beyond doubt about the evil influence worldwide.

    2. itchyvet says

      Ralph, kindly elaborate on the claim of “good Americans” as in my 70 + years on this planet, I have discovered the MAJORITY of Americans stand by and support their Government on everything it does externally.

      1. Ralph London says

        That’s why I said the ‘good Americans’ – even if in the minority – need to remove the Deep State/those in the usg allied to it.

    3. David Bedford says

      The Bank of International Settlements wants to take away America’s sole reserve currency and have a basket of 4 or 5 countries instead.
      To qualify you’d need to have at least 2000 tons of gold, that word disqualify America as the Fed admitted in congressional questioning to Ron Paul in 2009 that the Federal reserve holds no gold they just have it on their books.

      That’s why Russia has been frantically buying gold.
      I’m not sure how much Germany, France and Italy have either but US allies UK and Australia sold most of their gold when he was just $350 per ounce.
      China’s ‘official reserves’ just reached 2000 tons and it is rumoured her citizens hold about 20,000 tons, They’re rumoured to be launching a gold backed digital currency soon too but I don’t want to speculate.

      1. Robert Bruce says

        Pepe Escobar wrote recently on the gold backed digital yuan that China is ready to launch. Where did you read that the BIS wanted a basket of currencies. That idea has been on the table for over a decade.

      2. Josep says

        By ‘tons’, do you mean long tons, short tons, or metric tons? What do the official instructions say?

      3. Ralph London says

        You mean the american FRAUD currency, backed up by…threats, sanctions and force.

  3. dicecop says

    “annexation” lol. Seems like anti-empire is slowly becoming pro-empire

    1. XRGRSF says

      ????

      1. David Bedford says

        I think he skipped across a story?

  4. bob says

    Gazproms a basket case

    Its Power of Siberia pipeline,remember that one,the deal of the century for Putin and his mates in China?

    Well its been discovered that capacities for gas have been overestimated and that could cost Gazprom $20 billions due to short falls,yikes !

    So all these pipeline things don’t seem to be doing to well for Putin,either they’ve lied about the amounts of gas or they have to navigate foreign territories which they have no power over,like the EU and American sanctions

    What a plonker Putin must be to build so much of his country’s future and economy around oil and gas,never a good idea,he’s basically squandered 20 years in which he could have built a far more diversified economy

    1. XRGRSF says

      Bob, I find you amusing, but there are times when your lies border on stupidity. I’m a retired pipeline engineer, and I’m far more familiar than most with Russia’s pipeline system, both old, and new. IMHO Russia has the best pipeline technology in the world, it’s light years ahead of the U$, and there is no shortfall of capacity in the Power of Siberia line. If there was a capacity issue the Russians would just lay another line, down the established right of way, to supply the required product. As for using an old ship to lay pipeline: It may not be as fast as a new ship, but it will get the job done. I was laying open ocean pipe in the old days, and we got it done so I’m certain that Russia can do the same.

      1. fluttershield mlp says

        Russians are very intelligent. The USA bullies should leave Russia alone.

      2. bob says

        Theres no gas you clown,so it doesn’t matter how high tech the pipes are

        They’ve basically vastly overestimated the gas reserves,and like usual lied,its a breaking news story in Moscow Times,go read it foe yourself,anyway why should you care its a Russian problem

        As for just laying piping great,but unfortunately the Baltic seems to be full of munitions dumped after the war…..BOOM if you get it wrong,maybe the CIA_should sabotage north stream and just blame it on all those old bombs on the sea bed ,oh and Russia’s fabulous rust bucket pipe laying thing

        1. plamenpetkov says

          Moscow Times are a well known USA/West financed anti Putin/anti Russia rag. To believe them is as smart as believing what Trump says.

          Now go and drink your bleach as Trump told you to.

          1. bob says

            Those pipes are just gonna be rusting junk at the bottom of the Baltic sea,as absolutely no gas is ever go through them,even if it did it’ll be only on the EU conditions,you know all those EU Directives

            The EU ,eh,should have said Germany,is gonna own Putin’s backside,but hey he thinks he’s the smart one 😂😂😂😂😂😂

            Why do you think Britain wanted to leave,because they understood that doing business with them isn’t good,and Russia,addicted as it is to gas and oil,hasn’t many options,so basically they’re buggered,as Putin hasn’t developed the Russian economy into a diverse powerhouse,but kept it in its old Soviet style race to the bottom mode,oh but i forgot,he’s got expensive wizz bangs ,well that’ll do the job won’t it 😂😂😂😂

            Now you go and gulp down some of that kremlin kool aid,yum,yum 😋😋😋

            Oh and Moscow Times tell the truth about Russia,thats why people like you hate it,ooooh didums,did it spoil your little pro Putin fantasy world,oh dear,what a pitty,never mind 😝

    2. pogohere says

      These “facts” are alleged in Gazprom Could Lose $20Bln on Flagship China Pipeline: Lenta and sourced from Dreams come true.

      There’s quite a bit of granular detail presented, but no documentation. Proceed at your own risk.

      1. pogohere says

        Another Russian persepective:

        Expert: They are trying to give the problem of filling the Power of Siberia gas pipeline a large-scale character

        5-28-20

        “Perhaps Gazprom broke the firewood. But this does not pull on the collapse of the project “Forces of Siberia”. Rather, they are trying to give the problem a larger scale, ”Stanislav Mitrakhovich, senior researcher at the Financial University under the Government of Russia, told the newspaper VZGLYAD. So he commented on the media information about the allegedly serious miscalculations in the development of the resource base for gas supplies to China.

        “Gazprom with all its difficulties is a powerful player. Therefore, this may be a large media campaign against Gazprom. There are players, including inside Russia, who are interested in developing such a negative story, ”says Stanislav Mitrakhovich, senior researcher at the Financial University under the Russian government and a leading expert at the National Energy Security Fund.

        According to Lenta.ru , the Power of Siberia gas pipeline allegedly ran into serious problems due to large-scale errors and violations during the development of the Chayandinskoye field. Therefore, Gazprom risks losing 1.5 trillion rubles and disrupting a multibillion-dollar gas supply contract to China, the publication believes.

        “On the other hand, apparently, there really are some technical difficulties, because there have been rumors about this before. But how large-scale these problems are is not clear. The main question is whether Gazprom will be able to resolve this situation in the future, or is it the end of the world? ”Mitrakhovich says.

        According to the expert, Gazprom has opportunities to solve the problems, because he has money. “In the end, Gazprom can borrow from Russian or Asian banks. For now, he can be borrowed both in the USA and in Europe. Given that the “Power of Siberia” is gaining power gradually, then the time for this may be, ”says the expert.

        The second solution to the problem is to attract independent gas suppliers into the pipe and expand the resource base. For example, Rosneft persistently requested access to the project.

      2. bob says

        I have no risk whatsoever,it seems its all Russian and Chinese risk,I’ll sleep easy tonight my friend 😁

  5. voza0db says

    It’s all running smoothly!

    The Russia-Poland transit deal for natural gas from the Yamal peninsula to Germany, via Belarus and Poland, expired on May 17. Poland has aligned its legislation with the energy regulations of the European Union (EU) and Polish operator Gaz-System began offering capacity bookings on the Polish section of the Yamal-Europe pipeline in accordance with EU regulations.

    So now Germany has another INCENTIVE to go ahead with the PLAN!
    https://uploads.disquscdn.com/images/e184de9b1cf18e2e40d1ed73f83d6248f1fdc5750c4942e22f42b49a89362d9a.png

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