If the Kremlin invaded Ukraine, the United States threatened to suspend the multi-billion-dollar natural gas pipeline project between Russia and Europe Nord Stream 2. Developments continue as Moscow continues to build troops along the country’s border with Kiev, raising concerns about a possible Russian invasion is the purpose of the Kremlin.
“I want to be very clear. If Russia invades Ukraine in any way, “Nord Stream 2 will not move forward,” said Ned Prais, a spokesman for the US State Department, a few days ago.
It should be noted here that the Nord Stream 2 gas pipeline, which connects Europe and Russia via the Baltic Sea, has strained relations between NATO allies, the United States and Germany, in recent years. Despite US fears that the pipeline could give Russia leverage over gas supplies to Europe, Nord Stream 2 threatens to affect Ukraine’s economy by bypassing the country’s gas transmission network to deliver natural gas to Europe.
(The Nord Stream 2 pipeline will create a direct link between Gazprom and European consumers, bypassing Ukraine; Photo: Shutterstock)
Will Nord Stream 2 freeze the Ukrainian economy?
In June 2015, four years after the opening of the twin Nord Stream 1 pipeline across the Baltic Sea between Russia and Germany, leading energy companies, including Royal Dutch Shell and Russian-owned Gazprom, agreed to build Nord Stream II – a move that strained Germany. – US relations, regardless of the threat of significant losses to Ukraine in the form of transit funds.
Ukraine earns $ 2.66 on gas transit per 1,000 cubic meters per 100 kilometers, according to the Oxford Energy Research Institute. Under current agreements with Russia, which supplies more than 35% of Europe’s natural gas, Ukraine earns more than $ 1 billion a year in gas transit costs.
In action, Nord Stream 2 threatens to eradicate this much-needed stimulus to the Ukrainian economy, which contracted by 4% in 2020 due to the COVID pandemic. After the recession, the country’s economy grew by only 3.4% in 2021. per Gazprom, Abu Nord Stream 2 chains have a total capacity of 55 billion cubic meters of gas per year. The company stated on its website that the combined design capacity of Nord Stream and Nord Stream 2 is 110 billion cubic meters of gas per year.
Although the pipeline is unlikely to cause serious damage to Ukraine’s economy, it will have a significant impact on a country that has found it difficult to recover from Russia’s annexation of Crimea since 2014. According to reports, Ukraine’s economy has shrunk by 7 percent. % In 2014 and around 10% next year. Russia also has significant influence over the former Soviet state, as it is one of its largest export partners.
The European Union opposes Nord Stream 2
In March 2016, eight EU countries, including Poland, Romania, the Czech Republic, Estonia, Hungary, Latvia, Slovakia and Lithuania, strongly opposed the gas pipeline project, citing “destabilizing geopolitical consequences”.
In 2019, under the then President Donald Trump, the United States signed a bill that would penalize companies involved in the Nord Stream project and those who indirectly assist it. However, last year Russia continued and completed the construction of a 1,200 km submarine gas pipeline.
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(Photo taken in 2018 shows Nord Stream 2 pipeline under construction; Photo: AP)
However, Russian gas remains an important source of energy for EU countries, which plan to reduce their net greenhouse gas emissions by at least 55% by 2030, in line with the European Green Agreement. At present, 22% of the EU’s energy requirements are met through the natural gas route. More than 35% of this is provided by Russia via Nord Stream 1 and transit lines through Poland, Belarus and Ukraine.
As the European Union included natural gas in the green energy classification in its December 2021 project and the 27 countries in the bloc are working to switch to cleaner fuels, demand for natural gas is expected to increase significantly. The main exporters of natural gas to European Union countries, excluding Russia, are Norway, Algeria and Qatar.
Does Nord Stream 2 have US influence on Russia that prevents an invasion of Ukraine?
As already mentioned, a total ban on the Nord Stream 2 project will have a severe impact on gas supplies to European countries, including the US Allied NATO; However, as Russian-owned Gazprom funded 50% of the project and Europe remains one of Russia’s largest natural gas markets with few alternatives, sanctions will hurt the Kremlin’s economy.
However, before imposing sanctions on natural gas exports from Russia to Europe, EU countries will have to look for two alternative sources. In addition, sanctions against Nord Stream II also threaten to have a negative impact on the five largest European energy companies with significant holdings in the pipeline, including ENGIE, OMV, Shell, Uniper and Wintershall Dea.
Against this background, US President Joe Biden met with his European counterpart Urzula von der Leien after taking office last January. The two world leaders said in a joint statement that they were “working with governments and market operators to supply Europe with additional natural gas from around the world”.
These sources include Norway and Algeria. However, for this to be enough to meet the growing demand for natural gas in Europe, the phasing out of other fossil fuels by countries would require significant investment in infrastructure and production capacity.
Given the current situation, it should be noted here that Ukraine has accused the United States of damaging its economy by exacerbating tensions with Russia. Ukrainian President Volodymyr Zelensky told reporters on Friday, January 28, that continued US rhetoric against Russia is causing market panic to the detriment of the financial sector.
“We are grateful to the United States for its support for our independence and territorial integrity. But I am the President of Ukraine and I am here and I know more details and I have deeper knowledge than any other President. ” Blumbergs Zelensky was quoted as saying.
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