US, Mindful of Germany... Lifts Sanctions on Russian Gas Pipeline Nord Stream 2

95% Completed... Sanctions Practically Fail
US Steps Back to Prevent Deterioration of Relations with Germany
Opposition Voices from US Political Circles and Ukraine

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The United States has effectively admitted that its attempt to block Russia's Nord Stream 2 gas pipeline project has failed. The U.S. State Department has withdrawn sanctions against the Russian companies implementing the Nord Stream 2 project, stating that halting the project is "nearly impossible." Analysts suggest that the U.S. authorities have stepped back out of concern over deteriorating relations with Germany, which is actively promoting the project.

According to Bloomberg on the 19th (local time), the U.S. State Department announced in a report submitted to Congress that it plans to lift sanctions on the Nord Stream 2 gas pipeline project, which supplies natural gas from Russia to Germany. The sanctions relief targets include Nord Stream 2 AG, the operator of Nord Stream 2, and its CEO Matthias Warnig.

Already 95% Complete... Sanctions Lifted Due to Concerns Over Worsening Germany Relations

The Nord Stream 2 project, which began construction in 2018, aims to double the volume of natural gas directly supplied from Russia to Germany. The core of the project is a 1,230 km long underwater natural gas pipeline connecting Russia and Germany. The Nord Stream 2 pipeline, with a construction cost of 9.5 billion euros (approximately 13.33 trillion KRW), is led by Russia's energy company Gazprom holding a 51% stake, with European companies such as German trading firms Uniper and Wintershall (a subsidiary of BASF), and French energy company Engie also investing.

Concerns had been raised that the Nord Stream 2 project would increase Germany's dependence on Russia, posing a threat to European energy security. The U.S. responded by imposing sanctions to block the construction of the Nord Stream 2 pipeline, putting the project at risk of collapse.

However, with the U.S. announcing the lifting of sanctions, the Nord Stream 2 pipeline is expected to be completed. Analysts interpret this change in the U.S. stance as a pragmatic decision, given that 95% of the construction has already been completed, making a full halt to the project difficult.

Additionally, amid conflicts with Germany during the Trump administration, including demands for a significant increase in U.S. troop deployment costs in Germany, the Biden administration's decision is seen as an effort to restore the deteriorated U.S.-Germany relationship. A State Department official who announced the report stated, "Continuing sanctions would lead to worsening relations with Germany and the European Union (EU)."

Katya Yafimava, a researcher at the Oxford Institute for Energy Studies, viewed the sanctions lift as "a positive factor in the relationship between the U.S. and Germany."

U.S. Politicians Demand Project Halt... Ukraine Opposes, Fearing Economic Isolation

The U.S. government's plan to lift sanctions has sparked criticism among lawmakers. Concerns arise that Russia will gain significant political and economic benefits as the Nord Stream 2 project nears completion.

Republican Senator James Risch, a member of the Senate Foreign Relations Committee, opposed the move, stating, "The completion of the Nord Stream 2 pipeline poses a threat to U.S. security and will destabilize the geopolitical structure." Democratic Senator Jeanne Shaheen also emphasized, "All measures must be mobilized to halt this project."

Ukraine has also opposed the U.S. plan to lift sanctions. If the Nord Stream 2 project is completed, Russian natural gas could bypass Ukraine and be supplied directly to European countries, raising concerns about Ukraine's increasing economic isolation.

Until now, Russian natural gas destined for Europe had to pass through pipelines crossing Ukraine, allowing Ukraine to act as a gatekeeper. Ukraine earns $2 to $3 billion annually as fees for pipeline usage. However, with the Nord Stream 2 pipeline enabling Russian gas to bypass Ukraine, Ukraine risks losing all of this revenue.

[Image source=Reuters Yonhap News]

Yuriy Vitrenko, CEO of Ukraine's state-owned energy company Naftogaz, stated, "The Nord Stream 2 project is the most geopolitically threatening project," and announced plans to urge the U.S. to take all possible measures to halt the project.

This content was produced with the assistance of AI translation services.