Nord Stream Pipeline

Germany halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognized two breakaway regions in eastern Ukraine - Donetsk and Luhansk as "independent" and unleashed a full scale war against Ukraine.

• This is a huge change for German foreign policy with massive implications for energy security and Berlin's broader position towards Moscow. The United States, the United Kingdom, Ukraine and several European countries had opposed the pipeline since it was announced in 2015, warning that the project would increase Russia’s influence in Europe.

About Nord Stream Pipeline

Nord Stream consists of two pipelines-

• Nord Stream 1 was completed in 2011 and runs from Vyborg in Leningrad to Lubmin near Greifswald, Germany.
• Nord Stream 2 which runs from Ust-Luga in Leningrad to Lubmin was completed in September 2021.
• The twin pipelines together can transport a combined total of 110 billion cubic metres (bcm) of gas a year to Europe for at least 50 years.
• The gas for Nord Steam comes mainly from the Bovanenkovo oil and gas condensate deposit in Western Siberia.
• The Nord Stream crosses the Exclusive Economic Zones (EEZs) of several countries including Russia, Finland, Sweden, Denmark and Germany, and the territorial waters of Russia, Denmark, and Germany.

Significance of Pipeline

For Europe

• Europe requires more than 100 billion cubic metres (bcm) of natural gas each year and around 40% of its gas comes from Russia.
• Over the last few years, Europe has become more dependent on gas imports because of a decrease in domestic gas production.
• Further, there is no infrastructure to import LNG from exporters like Qatar and the U.S. and there are question marks over the desirability of shipping gas.

For Russia

• For Russia, which has the largest natural gas reserves in the world, around 40% of its budget comes from sales of gas and oil.
• Nord Stream 2 is important because it eliminates the risks related with transporting gas through transit countries, cuts operating costs by doing away with transit fees and gives direct access to its most important European customer, Germany.
• It increases Europe’s dependence on Russia while giving it a reliable customer.

Objections to the Pipeline

Strategic Objection

Some of the issues associated with the project are as follows:

• EU’s Increased Dependence on Russia: The project will significantly increase Europe's dependence on Russia for Natural Gas. As such, currently EU countries rely on Russia for 40% of their gas needs.
• Strategic Advantage for Russia: There is concern that Russia could use it as a geopolitical weapon and increase Russia’s influence in Europe.
• Ukraine’s Disadvantage: There is an existing pipeline between Russia and Europe running through Ukraine. Once the Nord Stream 2 project is completed, Russia possibly could bypass Ukraine, depriving it of a transit fee of around $ 2 billion.
• Concern of other Countries: Countries like Poland and Belarus also stand to lose transit fees and hence oppose the pipeline as it will bypass existing pipelines running through them.

Environmental Objections

• The pipeline has run into trouble from environmentalists who argue that it does not fit in with German efforts to cut dependence on fossil fuels and fight climate change.
• The $11 billion-worth Nord Stream 2 has not yet started operating because Germany says it does not comply with German law and has suspended its approval.