The Kremlin Maintains Nord Stream 2 Will Be Completed

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The Kremlin Maintains Nord Stream 2 Will Be Completed

Mon, 01/25/2021 - 10:10
Kremlin in the morning sun (copyright by Shutterstock/Baturina Yuliya)
Kremlin in the morning sun (copyright by Shutterstock/Baturina Yuliya)

While Russian gas producer Gazprom has acknowledged in a Eurobond prospectus that Nord Stream 2 gas pipeline project may be suspended or scrapped due to political pressure, the Kremlin followed on the same day to assert that the project would be completed.

The undersea Russia-to-Germany pipeline, set to double the existing Nord Stream’s annual capacity to 110 billion cubic metres, has become a point of contention between Moscow and Washington, which has slapped sanctions against the project.  German news daily Bild reported last Tuesday that the German company Bilfinger Engineering was the first to pull out of Nord Stream 2, amid the threat posed by sanctions.

According to Bild, Bilfinger Engineering has at least two contracts with the pipeline that would be immediately withdrawn.

This could pose problems for Gazprom. The company said that should Nord Stream 2 be suspended or canceled, it may face financial claims from contractors. "We may be required to pay compensation, including damages, penalties, cancellation fees and make other payments. We may also be required to record significant impairment provisions relating to our investments," Gazprom said, according to Reuters.

The $11-billion project was suspended in late 2019 after the main pipe-laying company, Allseas, dropped out amid sanctions. The work resumed last month when a small 2.6-km stretch of the pipeline was built in Germany’s waters. Among the next steps is resuming work in Denmark’s part of the Baltic Sea, where the bulk of the remaining sections of the 157-kilometer link will be located.

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