"US, Conditional Agreement on Germany-Russia Gas Pipeline Establishment... Immediate Sanctions if Used as Weapon" (Comprehensive)

Demand for Compensation of Ukraine Gas Transport Fee Losses
Gas Pipeline 98% Complete...Construction Sanctions Judged Ineffective

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The Joe Biden administration in the United States is reported to have reached a conditional agreement with Germany regarding the Nord Stream 2 gas pipeline project between Germany and Russia. The U.S. has warned that if Russia abuses the pipeline as a political weapon, the pipeline will be subject to sanctions.

On the 20th (local time), Bloomberg News cited a draft agreement on the Nord Stream 2 project between the U.S. and Germany obtained from a senior U.S. official, reporting, "The U.S. government has conditionally agreed to allow the construction of the pipeline," and "The official agreement is expected to be announced on the 21st."

On the same day, the U.S. State Department also indicated a positive negotiation atmosphere. Ned Price, spokesperson for the U.S. State Department, said in a press briefing regarding questions about the Nord Stream 2 negotiations with Germany, "While we cannot fully confirm the success of the negotiations yet, Germany has made a positive proposal, and the U.S. believes progress can be made toward achieving our shared goals."

The U.S. government reportedly set a condition that if Russia politically weaponizes the pipeline by suddenly halting gas transportation during diplomatic negotiations with Germany, it will immediately consider sanctions on the pipeline. Additionally, Bloomberg News reported that a condition was also presented requiring the German government to compensate Ukraine for the loss of gas transit fee revenue.

Previously, Ukraine opposed the Nord Stream 2 pipeline, arguing that if it were installed, Ukraine would lose about $2 billion (approximately 2.3 trillion KRW) annually in gas transit fee revenue, making it difficult to maintain Ukraine's security. Existing gas pipelines from Russia to Western Europe pass through Ukrainian territory, so Ukraine has received transit fees whenever Russia exports gas to Europe.

Despite European security concerns, the Biden administration's allowance of the pipeline construction is analyzed to be based on the judgment that imposing construction sanctions on a nearly completed pipeline project would have little effect. The Associated Press reported, "The pipeline is already 98% complete, and the Biden administration appears to have conditionally approved the project, judging that sanctioning a pipeline near completion would be inefficient."

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