Germany Considers Changing Foreign Trade Laws to Block Nord Stream 2 Pipelines Takeover

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Germany Considers Changing Foreign Trade Laws to Block Nord Stream 2 Pipelines Takeover

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Reichstag building, seat of the German Parliament (Deutscher Bundestag), in Berlin (© Shutterstock/MDart10)
Reichstag building, seat of the German Parliament (Deutscher Bundestag), in Berlin (© Shutterstock/MDart10)

Germany is considering an amendment to its foreign trade law to prevent a potential takeover of the company operating the Nord Stream 2 pipelines, a move aimed at permanently blocking any resumption of Russian gas imports, a government document revealed Friday.

The Nord Stream pipeline system, consisting of two double pipelines under the Baltic Sea to Germany, was a primary conduit for Russian gas to Europe, with a capacity of 110 billion cubic meters annually.

However, since the onset of the conflict in Ukraine, Berlin has aggressively pursued alternative energy sources, ending decades of reliance on affordable Russian hydrocarbons.

Chancellor Friedrich Merz has repeatedly vowed that the Nord Stream 2 pipeline, which Germany once supported, will never become operational. However, the government currently lacks the legal framework to prevent a sale of the pipeline's assets, which are ultimately owned by Russian energy giant Gazprom.

Nord Stream 2 was completed in 2021 but never went into service due to escalating tensions between Russia and Western nations. The pipeline was further impacted by unexplained explosions in 2022.  

Though one of its two lines remained intact, the pipelines remained offline due to multiple policy changes made after Russia invaded Ukraine in February 2022.

With the Nord Stream 2 pipeline damaged before official commissioning, and sanctions making it more challenging to restore, Swiss-based Nord Stream 2 AG has been undergoing insolvency proceedings, which could lead to asset sales. 

Last November, The Wall Street Journal reported that U.S. investor Stephen P. Lynch was attempting to acquire the company, a claim that was quickly denied by the Russian government.

In a parliamentary response dated June 24, the German Economy Ministry stated that the government is discussing a possible amendment to the foreign trade law within the current legislative period. The ministry noted that the existing law does not provide for an investment review in the event of such a takeover.

Der Spiegel magazine first reported on the potential legal change, as a Green lawmaker and former economy ministry state secretary, Michael Kellner, emphasized the need to close this loophole. 

"Pipelines in Germany or Europe do not belong in the hands of Russian or American companies," he told Reuters.

At the moment, it is still unclear whether or not the amendments will be actualized, as they would require multiple steps before being implemented.