Why Nord Stream 2 construction might not be completed?

Author : Zeitung Frankfurter Allgemeine

Source : Frankfurter Allgemeine

US government threats to put sanctions against the new pipelines, which would bring large quantities of natural gas to Europe
09:00, 14 August 2020

Nord Stream 2 gas pipeline

Uniper energy supplier warns of further delays or even failure of the Nord Stream 2 Baltic Sea gas pipeline, in which it is involved as a lender. The reason for this is the loud threats of sanctions by the US government against the new pipes, which are to bring large quantities of natural gas from Russia to Europe.

American resistance increases the probability "that there will be delays in the construction of the gas pipeline or that it will not be completed at all," according to the risk report of the half-yearly balance sheet published on Tuesday. For Uniper, a loan of 950 million euros is in the fire, the company is participating in the estimated total construction costs of around 10 billion euros.

Related: Polish PM: Nord Stream 2 is European payment for Putin's weapons

If Uniper fails, the company warns, "Uniper might be forced to adjust the value of the loan provided for Nord Stream 2 and might not be able to realize the planned interest income." The risk of failure continues to be qualified as a significant individual risk for the Uniper Group.

Lavrov: Pipeline to be completed

Meanwhile, Federal Foreign Minister Heiko Maas stressed that the United States would not dictate the European course in energy supply. "No state has the right to dictate its energy policy to the EU. And it won't succeed," he said in Moscow after a meeting with his Russian counterpart Sergei Lavrov. Referring to the American threats against the completion of the pipeline, he added: "Sanctions between partners (are) definitely the wrong way to go." Allegedly, Maas explained this to US Secretary of State Mike Pompeo.

Maas announced that Germany would push the issue of European sovereignty during its current EU presidency. Europe had values and interests. "If these interests are violated, then we will raise this issue (...) with the West."

Russian Foreign Minister Lavrov accused Washington of trying to impose its position all over the world. But the Nord Stream 2 project must be completed. "And as I understand it, there's every reason to believe it will happen soon."

Related: Poland fines Russian Gazprom for $57 million due to Nord Stream 2 construction

Extreme scenario possible

During a press conference, Uniper's CEO Andreas Schierenbeck and CFO Sascha Bibert tried to put the assessments in the risk report into perspective again.  "We believe that the management will be ready," said Schierenbeck. However, Schierenbeck said that the Group is legally obliged, and through its own risk management, to think in extreme scenarios and therefore cannot rule out the "worst one."

Related: German ecologists sue to halt construction of Nord Stream 2

"Our basic planning assumes that the pipeline will be completed and that gas will go through it," said Bibert. In its interim report, the Group assures that it is "actively monitoring" the situation. There is a constant exchange of views on how the US State Department is currently interpreting the sanctions law. The Nord Stream 2 project company, which is part of the Russian Gazprom Group, is working on completing the project despite all adversities.


Read the original text at  Frankfurter Allgemeine Zeitung

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