Page 13 - NorthAmOil Week 23

NorthAmOil POLICY NorthAmOil

US lawmakers back more

sanctions on Nord Stream 2

US-EUROPE THE US could impose more sanctions in an pipelaying vessels, the Akademik Cherskiy and
attempt to prevent Russia from completing the Fortuna, to complete the pipeline. Ship-tracking
Nord Stream 2 pipeline to Germany. But with a data shows that both ships are now stationed at
mere 6% of the pipeline left to lay, further puni- the German port of Mukran, which Gazprom
tive actions may fail to thwart the project, and has been using over the years as a storage base
could backfire by further straining Washington’s for Nord Stream 2’s pipes.
relations with Berlin. Cherskiy was owned by Gazprom’s shipping
US Senators Ted Cruz, Republican, and subsidiary Gazprom Flot but has been trans-
Russia is expected Jeanne Shaheen, a Democrat, introduced a ferred to a company called STIF, in an apparent
to use two of its own bipartisan bill to the Senate on June 4, named effort to remove the gas company from possible
pipelaying vessels, the the Protecting Europe’s Energy Security Clarifi- sanctions. STIF was connected with Gazprom as
Akademik Cherskiy and cation Act (PEESA). The draft legislation builds of April 1, according to Russian records, but it
Fortuna, to complete on a law passed in December that threatened is unclear whether this is still the case. Fortuna,
Nord Stream 2. sanctions against companies providing pipelay- meanwhile, belongs to a Russian services vessel
ing vessels for Nord Stream 2’s construction. The operator called Mezhregiontruboprovodstroy
move prompted Swiss contractor Allseas to quit (MRTS).
the project. Akademik Cherskiy appears to have already
“[Russian President Vladimir] Putin contin- been upgraded with a dynamic positioning sys-
ues to try to circumvent those sanctions, and so tem (DPS) required to work in Danish waters,
this new bill will once and for all clarify that those where the remainder of Nord Stream 2 will be
involved in any way with installing pipeline for built. However, Moscow-based Sova Capital
the project will face crippling and immediate noted in a recent research report that its crane
American sanctions,” Cruz said on his website. can only lift pipes up to 32 inches in diameter,
Efforts must continue to counter Russia’s whereas Nord Stream 2’s pipes are 48 inches in
“malign influence” in Europe, he said. diameter.
“Nord Stream 2 threatens Ukraine, Europe’s This could mean Gazprom attaches Cherskiy
energy independence and gives Russia an open- to Fortuna, which has a larger crane, to finish
ing to exploit our allies. Congress must once construction. But doing so could render Cher-
again take...action and stand in this pipeline’s skiy’s DPS unusable, meaning it would have
path.” to be anchored, Sova’s Mitch Jennings writes.
Nord Stream 2 had been due to start flowing Anchoring the vessels would require a further
gas under the Baltic Sea to Germany by the end permit from Denmark owing to the suspect
of last year. But construction fell behind sched- large amount of World War II munitions in the
ule because of Denmark’s delay in issuing new area. Gazprom would be unlikely to pursue this
permits and was halted completely after the US option given how long it took to get the earlier
The new sanctions were imposed. Putin has said the pipe- permits from Danish regulators.
Nord Stream 2 also faces regulatory head-
line could be finished by late 2020 or early 2021,
sanctions bill using Russia’s own pipelaying vessels. aches. An EU court has rejected Gazprom’s
The US has long opposed Nord Stream 2, request for the pipeline to receive a waiver from
will need to be blasting the project as a tool for Russia to assert EU energy rules. This means Gazprom may have
passed by both political influence in Europe. Moscow has coun- to partially sell the pipeline and provide third-
tered, saying Washington is simply looking out party access to its capacity. Polish regulators have
chambers of for the commercial interests of US gas exporters. also warned they may impose a fine on Gazprom
for not co-operating in an investigation into the
Congress and Laying the pipe pipeline’s financing.

signed into law The new sanctions bill will need to be passed by
both chambers of Congress and signed into law Straining ties
by US President by US President Donald Trump. Whether or not US sanctions make finishing the
It adds sanctions on companies providing pipeline harder, they are sure to irk Germany.
Donald Trump. services or facilities for pipelaying vessels, Nord Stream 2 enjoys broad support in the coun-
including welding equipment, retrofitting or try, which is phasing out both coal and nuclear
the tethering of the ships. These companies power, and wants to bolster its use of gas and
could have their US assets frozen and visas renewables to replace them.
blocked. German Economy Minister Peter Altmaier
At this late stage, though, it is unclear whether criticised Washington in late May for “escalating
the sanctions would have any impact. But this is this sanctions threat, which is extraterritorial
not to say the project does not face challenges. and thus in conflict with international law.”
Russia is expected to use two of its own Klaus Ernst, chairman of the German

Week 23 11•June•2020 www. NEWSBASE .com P13