US steps up sanctions pressure on Nord Stream 2

US steps up sanctions pressure on Nord Stream 2

PEJOURNAL – The construction of the Nord Stream 2 gas pipeline was stopped last December after US President Donald Trump signed a defensive policy act which included some sanctions on this project.

Expressing open opposition to the construction of the gas pipeline on 15 July 2020, US Secretary of State Mike Pompeo claimed that sanctioning Nord Stream 2 sends a clear message to companies that help expand Russia’s negative influence in Europe; and the United States will not accept the contribution and participation of these countries in the Nord Stream 2 gas project and they should cease their cooperation with this project or expect the negative consequences of such cooperation.

Pompeo, in fact, underlines that individuals and companies that support the Nord Stream 2 gas pipeline shall be sanctioned by the United States in accordance with the CAATSA Act (The Countering America’s Adversaries Through Sanctions Act)—an act passed in the US Congress and Senate against Iran, Russia and North Korea in 2017. Washington is in fact forming a coalition to prevent the completion of the gas exporting Nord Stream pipeline and stop Russian gas exports to Europe. From the view point of the United States, this gas pipeline would endanger Europe while making it dependant on Russia.

When the Nord Stream 2 gas pipeline is completed, estimates and studies indicate that the price of gas would remarkably reduce in Europe and the operationalization of this pipeline would impose enormous damages on American gas exporters as they will lose a big portion of their customers in Europe.

The United States is on the belief that the power of Russia’s influence in Europe would be multiplied when the Nord Stream 2 gas pipeline goes on stream and European countries would become more dependant on cheap gas coming from Russia. Gazprom, Russia’s energy giant, is the main contractor of the Nord Stream 2 gas pipeline project; however, half of its costs are going to be borne by fife major European companies including ENGIE, OMV, Royal Dutch Shell, Uniper, and Wintershall.

It has already been announced that the Nord Stream 2 gas project is going to be inaugurated in 2020 with a total cost of 10 billion euros. However, given the imposition of US sanctions and withdrawal of some companies from the completion of the project, it is not clear when it is going to go on stream.

Germany is the main customer of Nord Stream gas

Germany will be the main consumer of the gas transmitted directly to Europe through the Nord Stream 2 pipeline; however, the United States is opposed to the construction of this pipeline and claims it will result in increasing Russian influence and power in supplying energy to Europe. Of course, the gas interests of the United States as a large exporter and supplier of LNG to Europe also plays a role in America’s opposition to Nord Stream 2. Germany is now divided in this respect.

Angela Merkel, the Germany Chancellor, is under growing pressure; even her party members are questioning the continuation of the construction of this pipeline. Despite political demands from the entire spectrum to stop the construction of Nord Stream after the poisoning of Russian dissident Alexei Navalny, Merkel remains keen on continuing this project.

The withdrawal of Germany and the cancellation of the construction of Nord Stream 2 pipeline are equal to the waste of years of efforts by the German government to convert Germany to a hub of lucrative gas export in Europe. Inter alia, the German Foreign Minister Heiko Maas has had contradictory stances. Once he rejected the cancellation of the gas project as a reaction to the case of the poisoning of Navalny; on another occasion, in the Bundestag, Maas threatened to stop the construction of the Nord Stream 2 gas project and impose sanctions on Moscow if Russia does not clarify the Navalny case.

Russia insists on independent decision by Germany without pressure by the US

The Nord Stream 2 gas pipeline has the capacity of doubling the transfer of gas through the Baltic Sea to Germany, increasing it to 110 billion cubic meters of gas per year. It will also diminish Russia’s use of Ukraine as a transit country for the export of gas to Europe. In the belief of Sergey Lavrov, the Russian Minister of Foreign Affairs, Germany should ignore requests and demands by other parties to terminate this project as it has now turned into a critical issue for the face of Germany.

Moscow wants Berlin to take a decision itself alone on the Nord Stream 2 and do not surrender to the pressure exerted by the United States. From the view point of Moscow, this is an international commercial project in accordance with European standards; it has obtained all the necessary permits and licenses and the European Union should be able to secure its own energy needs.

The Karabakh war and Europe’s energy

With the collapse of the former Soviet Union, the countries of the region tried hard to exploit and sell hydrocarbon resources from the Caspian Sea to the markets. The important oil pipeline project of Baku–Tbilisi–Ceyhan (BTC) was inaugurated in 2006 with the investment of multinational foreign companies to transfer the oil of the Republic of Azerbaijan to the market. The United States and Europe tried to utilize energy resources in Central Asia and the Caspian Sea without the need to transit through the Russian soil and the use of its energy infrastructure.

With the beginning of the Karabakh problem, many problems were created for the Republic of Azerbaijan in political and security terms. Notwithstanding, the Azerbaijan continued its plans to increase the export of energy and strengthen its defense foundation. The dependency of Europe on the gas of Russia and the efforts by the European Union Member States to diversify the needed energy resources have provided a good opportunity for Baku to play its role in the equations of energy and politics and security of the region.

The Trans-Anatolian Natural Gas Pipeline (TANAP), also known as the Silk Road of Energy was inaugurated in 2018. It begins from Shah Denir 2 region near the Caspian Sea in Baku and passes through the soil of Georgia and continues to Turkey and then ends in Italy. This pipeline has in fact created a corridor from the Caucasus to Anatolia and Europe (Caucasus-Anatolia-Europe) with the participation of 12 companies from six countries, with a capital of 40 billion dollars.

The project to transfer the gas of Azerbaijan to Europe, with the capacity of 16 billion cubic meters of gas, includes two stages of the TANAP project with the primary capacity of transiting six billion cubic meters of gas and the TAP (Trans Adriatic Pipeline) project with the capacity of 10 billion cubic meters of gas from Azerbaijan to Italy.

The Tovuz region where Azerbaijan and Armenia first started their fight in the beginning of summer is of great strategic significance for both Azerbaijan and Turkey because the Baku–Tbilisi–Ceyhan (BTC) pipeline, the Baku–Tbilisi–Kars railway, the South Caucasus Pipeline and the Trans-Anatolian Natural Gas Pipeline (TANAP) all pass through it. The Baku–Tbilisi–Ceyhan (BTC) and the TANAP pipelines have set up various consortiums for this purpose with the participation and contribution of energy companies from other countries such as the United States, Britain, Norway, Russia and Turkey among others.

Targeting this pipeline by Armenian army would cause response from these countries as well as the European Union. Russia has always considered Armenia as its natural ally and has treated Yerevan like a country which is totally dependent on Moscow. On the other hand, Russia has established numerous companies in the energy and defense sectors in Azerbaijan.

There is a camp in Turkey which points the finger of blame to Russia in the tension between Armenia and Azerbaijan. In its belief, Russia is seeking to make these two countries more independent on Moscow—two countries which have long acted against its wishes. Russia is also seeking to distance Turkey from the Western alliance to stop it from exploiting oil in the Aegean Sea.

In the belief of this camp, the gas contract between Turkey and Russia expires in 2021 and Turkey is going to compensate some of the ensuing energy shortage from Azerbaijan through the TANAP. This is itself a good reason for Russia to seek instability in the border between Azerbaijan and Armenia. The attacks by Armenia would target both Azerbaijan and Turkey. Armenia’s attacks would impact the geopolitics of the energy in the region with Turkey in its center. There are also signs of a multinational scenario.

The attacks by Armenia constitute a threat against Turkey in the Caucasus which is facing problems and crises in the Black Sea, East Mediterranean, Libya and the east and west of Euphrates. This reality also indicates that the attacks by Armenia are being supported by the US, Israel, Greece, France, Saudi Arabia and others in the same camp and have close links with the provocative measures of these countries.

The other point of such developments is related to the lines of energy and tension in the East Mediterranean. Some believe that the United States, has been trying for a long time to break the influence of Russia on the Greek Cypriots and the US is behind it to strike a blow to the Nord Stream 2 pipeline project. If successful, Americans would prevent Russia from huge commercial benefits of selling gas to Europe and would instead introduce East Mediterranean (and Israeli) gas resources as a guarantee for the continuation of the flow of energy to Europe. The United States is now implementing this play through Greece and Cyprus as two allied members of the European Union.

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