Nord Stream 2 Completed: The Game Is Over

Nord Stream 2 is considered an "energy game" with two main players, Russia and Germany, in which Germany's political will plays a particularly important role in helping this project overcome many controversies, objections, and even threats of sanctions from the US and the West.

The Nord Stream 2 project completes the final kilometers. Photo: Russia Energy

Germany's Choice

In a Kremlin statement announcing the progress of Nord Stream 2, Germany was mentioned in a very respectful way: “The Russian President highly appreciated the German side’s determination to complete this project, which is aimed at strengthening Germany’s energy security.” But even without Russia’s praise, public opinion can clearly see the particularly important role of Germany in the Nord Stream 2 project. Among them, it is impossible not to mention the significant efforts of Chancellor Angela Merkel until the last months of her term in office when she went to Washington and received a nod from President Joe Biden to complete this gas pipeline project.

Much has been said about Russia’s “mystical pull” on the German elite – the so-called Russlandversteher. Angela Merkel is no exception, despite disagreements over Ukraine and Russian influence in Eastern Europe. But she is particularly convinced of the role of Russian gas in Germany’s energy security, which is why Germany’s choice for Nord Stream 2 was clear and consistent from the start.

Like Nord Stream 1 (completed in 2011), the Nord Stream 2 project will deliver gas via a 1,200km pipeline under the Baltic Sea, starting in St. Petersburg and landing in Germany's North Sea. With a total annual capacity of about 110 billion m³, Nord Stream 2 allows Russia to bypass the need to send gas via Ukraine. Rejecting concerns that the project will increase both Germany and Europe's dependence on Russian gas, reducing Europe's ability to deter Russia in regional issues such as Crimea, Germany said that there is no difference whether gas is sent via Nord Stream 1 or 2.

But Germany’s choice is clearly based on calculations about finding cheap, reliable energy sources, and in this respect Nord Stream 2 is superior to the pipeline system through Ukraine. Many people liken Nord Stream 2 to the pipeline system through Ukraine to comparing fiber optic cables to copper cables! After 5 decades of use, the pipeline through Ukraine has leaked to the point that experts estimate it will cost 6 billion Euros to repair. Besides, Russian gas supplier Gazprom can deliver gas to Germany at a lower cost, with less complexity, eliminating the 3 billion USD/year transit cost for Ukraine.

Chancellor Angela Merkel strongly defends the Nord Stream 2 project. Photo: Reuters

Germany’s choice is very practical in terms of the development of its domestic energy sector. Next year, Germany will close its last nuclear reactor, and plans to end coal-fired electricity generation by 2038. Although the share of renewable energy in Germany’s electricity mix is ​​gradually increasing, it is still below 50%. This means that Germany will have a large gap in its energy supply, and gas is part of the strategy to fill this gap. Gas is also currently the source of heating for about 45% of German households.

Opponents of Nord Stream 2 have argued that Germany could get its gas via the current eastern route through Ukraine, or via Belarus and Poland, or liquefied natural gas from the United States via Turkey and other European countries. But in the eyes of German leaders, none of these options promises the simplicity and reliability of Nord Stream 2.

Ukraine's uncertain future

In the economic-political game called “Nord Stream 2”, the biggest loser is Ukraine, and that loss is evident in both economic and political aspects. As a modern, high-capacity gas pipeline system, Nord Stream 2, running directly from Russia to Germany, will weaken Ukraine’s role as a regional gas hub. The reduction in the volume of gas transited through Ukraine by Russia is expected to cause Ukraine to lose up to 3 billion USD/year in revenue.

Not only that, Ukraine also lost an important political weapon to defend itself against Russia's moves on its eastern flank. That is why, before the completion of Nord Stream 2, Ukrainian President Zelenski declared that this is a "dangerous political weapon", threatening Ukraine and Europe. Last weekend, during a visit to Germany's Chancellor Angela Merkel in Ukraine before Merkel went to Russia, Ukrainian President Zelenski asked Merkel to put pressure on Russia to continue to extend the gas transit contract with Ukraine for another 10 years after the contract expires in 2024.

To reassure Ukraine, Germany has pledged to impose sanctions on Russia if it uses energy as a weapon to carry out future aggression against Ukraine. However, as President Zelenskiy feared, this pledge was rather vague. In addition, Russia’s proposal to extend its gas transit contract with Ukraine beyond its 2024 expiration remains open.

German Chancellor Angela Merkel reassured Ukrainian President Zelenski during a visit last weekend. Photo: France 24

Although Angela Merkel and Vladimir Putin discussed the issue very seriously, Vladimir Putin used a "delaying" move when he said that Russia needs to assess the scale of European demand for fuel with Russia first, because Russia cannot sign a transit contract without a supply contract with consumers in European countries.

According to analysts, although the US and the West consider Ukraine an important factor on the eastern flank in the battle against Russia, Ukraine is not strong enough for the "big players" to accept sacrificing geopolitical calculations. One detail that is still mentioned is that when US President Joe Biden and Russian President Vladimir Putin confirmed that they would discuss the Ukraine issue at the Geneva summit in June, the US President refused the offer to meet the Ukrainian President before the meeting.

Nord Stream 2 is said to be 95% complete.

On the Russian side, President Putin also showed no interest in meeting with Mr. Zelenski. Therefore, although Prime Minister Angela Merkel pledged to make efforts to ensure Ukraine's security until the last hours before leaving office, Ukraine is still very concerned about the country's uncertain future after Nord Stream 2 comes into operation, depriving the country of an important economic and political weapon.

But whatever Ukraine’s concerns, the Nord Stream 2 game has now been decided, and it is no exaggeration to say that it is a great victory for Russia. Even the US, after years of opposition and sanctions, has finally had to admit that there is no way to stop the project. All parties – whether they like it or not – are forced to bet on Russia’s commitment to operate Nord Stream 2 as an economic project, not as an economic-political weapon for Europe and for Ukraine itself.