The Biden administration waived sanctions on the company behind Russia’s Nord Stream 2 gas pipeline to Germany and its chief executive, Secretary of State Antony Blinken said. 

The decision came as the Biden administration seeks to rebuild ties with Germany. The waivers have no specific end date, but can be rescinded by the Secretary of State.

What is Nord Stream 2 project?

• Nord Stream 2 is a pipeline through the Baltic Sea, which will transport natural gas over some 1,230 km from the world’s largest gas reserves in Russia via the most efficient route to consumers in Europe.

• The new pipeline, which is more than 95 percent complete, will double Russian natural gas shipments to Germany.

• At the rate it is being constructed, Nord Stream 2 will be finished before the end of the year, if not sooner, analysts said.

• It follows the route of the original Nord Stream 1 pipeline, which began operations in 2011.

• It will have the capacity to transport 55 billion cubic metres of gas per year, enough to supply 26 million European households. 

• The aggregated design capacity of Nord Stream and Nord Stream 2 is 110 billion cubic meters of gas per year.

• This secure supply of natural gas with its low CO2 emissions will also contribute to Europe’s objective to have a more climate-friendly energy mix with gas substituting for coal in power generation and providing back-up for intermittent renewable sources of energy such as wind and solar power.  

• The Nord Stream 2 Pipeline will deliver gas from the vast natural gas field Bovanenkovo in North Russia’s Yamal Peninsula, which holds in total some 4.9 trillion cubic meters of gas reserves.

• Russian giant Gazprom has a majority stake in the project, working alongside an international consortium that includes Germany’s Wintershall and Uniper groups, Dutch-British giant Shell, France’s Engie and Austria’s OMV.

Why did the US oppose the project?

• The project has long been in the crosshairs of the United States, particularly by the administration of former president Donald Trump, which promoted US gas and openly criticised European countries for buying energy from Russia.

• Russian neighbours Poland, Ukraine and the Baltic states also fiercely opposed the pipeline, fearing it would increase Moscow’s political leverage in regional politics.

• US President Joe Biden has also opposed the $11 billion project that would take Russian gas from the Arctic to Germany, saying it is a bad deal for Europe. 

• The US is an exporter of natural gas to Europe in the form of LNG, but Russian gas is cheaper.

• Washington fears Russia could use Nord Stream 2 as leverage to weaken European Union states by increasing dependency on Moscow.

The move may boost US-Germany ties

• Germany has been pressing for the United States to drop its opposition to the project, arguing that the overall relationship was too important to sacrifice over what Berlin has described as a commercial project.

• The US officials hope the waiver will give time for discussions with Germany on potential negative effects of the pipeline and provide some leverage to deepen cooperation on broader issues, such as the pandemic, climate change, the economic recovery and dealing with China and Russia.

• The waiver also provides space for diplomatic engagement with Germany to address the risks that a completed pipeline would pose to Ukraine and European energy security.

Manorama Yearbook app is now available on Google Play Store and iOS App Store