As grinds into its fourth year, the idea that could pump gas to the European Union via Germany again is not as outlandish as it might have been a few months ago.
With efforts ongoing to end the war, speculation continues over the possible reintegration of Russian gas into the European Union’s energy mix.
, particularly the Nord Stream pipelines. The latest came from Michael Kretschmer, the CDU Minister President of the state of Saxony.
In an interview with German newspaper Zeit Online, he described the Nord Stream pipelines as a possible “opening for talks with Russia”. He even specified how much of Germany’s gas supply should come from Russia — 20%.
of repairing both pipelines of the damaged , with one undamaged.
Nord Stream 1 brought gas to Germany before the Ukraine war began, while Nord Stream 2 was finished in September 2021 but never actually entered service.
However, even if some in the German government are keen, many are not. New German Chancellor and CDU leader Friedrich Merz has made it clear he supports EU plans . Amid the rumors about the possible repair of the pipelines, the European Commission is currently consulting member states about permanently banning the use of Nord Stream.
US and Russia reportedly keen on Nord Stream deal
However both Russia and the are reportedly keen on a deal to get gas
Russian Foreign Minister Sergei Lavrov said recently that discussions with the US have included Nord Stream. Meanwhile, several reports say US investors are interested in buying Nord Stream 2 AG — the Swiss-based subsidiary of the Russian state-owned energy giant which owns the Nord Stream 2 pipeline.
In January, bankruptcy proceedings against Nord Stream 2 AG were delayed until May, with a redacted court document showing that Gazprom argued that the Trump administration could “have significant consequences on the circumstances of Nord Stream 2.”
Chris Weafer, an investment adviser who has worked in Russia for more than 25 years, told DW that there are serious discussions taking place regarding a US purchase of the company.
“There are proposals on the table from US buyers that want to buy the infrastructure, where they could act as a cut out between the source of gas, which is Gazprom, and the buyers of gas, which would be German utilities,” he said.
However, Ben Hilgenstock from the Kyiv School of Economics says it is not
“Whatever Russia and the United States negotiate with regards to Nord Stream 2 or 1 is entirely meaningless,” he told DW. “It is Europe’s decision in specific countries, to be fair, whether they want to purchase Russian pipeline gas through Nord Stream 1 and 2 again.”
German business suffers under energy costs
So is there any way Europe would want to buy Russian pipeline gas again?
Europe’s diversification away from Russian gas and oil after the full-scale invasion was the main factor that led to a surge in energy costs throughout 2022 and 2023. Although costs have come down significantly from those highs, the re-emergence of Russian energy into the mix would likely push costs down further.
German companies such as the chemical giant bore the brunt of . A spokesperson for the company told DW it would not speculate on any possible deals regarding Russian energy, but it did emphasize it was not the only factor affecting its business.
“The increased gas price is only one factor affecting BASF’s competitiveness,” the spokesperson said. “Other important reasons are the current weak demand and increasing import volumes.”
Wolfgang Große Entrup, managing director of Germany’s Chemical Industry Association (VCI), told DW that his members “welcome measures that reduce excessively high energy prices,” but he emphasized the importance of “reliable partners.”
“Supplies via Nord Stream 1 were unilaterally suspended by Russia in August 2022,” he said. “With a major effort, it has been possible to ensure security of supply even without Russian oil and gas. We should not fall back into old, supposedly comfortable, habits and avoid excessive dependence on individual countries in the future.”
However, Hilgenstock cautions that the lure of cheaper energy will always be capable of directing the discussion in some quarters.
“There is this vision out there of cheap Russian gas that can propel us back wherever,” he said. “That’s where the political pressure is coming from.”
A complicated route
Yet political opposition to a restoration of supply remains fierce in Europe. The EU Commission has repeatedly reiterated its strong stance against, in keeping with its current sanctions plans.
“Nord Stream 2 is not a project of common interest, it does not diversify EU’s energy sources,” an EU Commission spokesperson said at a press briefing on March 3.
Project of Common Interest (PCI) status is given to energy infrastructure projects, allowing them to benefit from an accelerated approval process and more flexible regulation.
The EU has pledged to quit all Russian fossil fuels by 2027 and the European Commission released a detailed strategy and roadmap on May 6 as to how it plans to achieve this.The roadmap mentions the stopping of all imports of Russian gas by the end of 2027 and says new contracts to supply any kind of Russian gas will be stopped by the end of 2025.
In this context, Hilgenstock thinks supporting the restoration of Nord Stream would be “absolutely bizarre and grotesque.”
“I think we would demonstrate that we’re fundamentally not serious about Russian sanctions. Turning around on this, specifically, means we are absolutely not serious about restraining Vladimir Putin’s ability to continue his war in Ukraine and threaten peace and prosperity in Europe. It would be an absurd development,” he said.
Even if some in the German and European political establishment were in favor of restoring one or both Nord Stream pipelines, argued Hilgenstock, there are “multiple technical obstacles.”
The Nord Stream 2 pipeline has never been legally certified by Germany, for one, and Hilgenstock said he doesn’t see the new German government doing that.
Then there’s the significant repair work, which Chris Weaver believes could start relatively quickly if the US was able to convince the EU of the merits of a deal.
“Those discussions are definitely taking place, and they are credible,” he said, adding that he expects some Russian gas going back to Europe, “but probably no more than 50 % of the volume that was sold before the invasion” in February 2022.
However, Hilgenstock believes it is vital the EU makes it clear to the US that the re-opening of the Nord Stream pipelines is not up for discussion.
“We just have to say, this is not happening. And whatever bullying you’re attempting, we are not undermining a fundamental element of our policy to constrain Russia,” he said.
Edited by: Uwe Hessler
The post Nord Stream: Could Germany return to Russian gas imports? appeared first on Deutsche Welle.
