Sep 10, 2021 - World

Russia's Gazprom says Nord Stream 2 pipeline is complete

Merkel and Putin

German Chancellor Angela Merkel and Russian President Vladimir Putin. Photo: Adam Berry/Getty Images

Construction was officially completed Friday on the controversial Nord Stream 2 pipeline, which will allow Russia to bypass Ukraine in delivering natural gas directly to the heart of Europe, according to Russian energy giant Gazprom.

Why it matters: The $11 billion pipeline has been condemned as a "Kremlin geopolitical project" by the Biden administration and is vigorously opposed by Ukraine, which considers it to be a grave threat to national security.

The big picture: U.S. sanctions targeting firms involved in the pipeline froze progress in 2019, frustrating Germany and the European Union, but construction by Russian vessels resumed a year later.

  • President Biden, viewing the project as a "fait accompli" and seeking to reset U.S.-Germany relations that had frayed under the Trump administration, waived sanctions earlier this year.
  • The move drew outrage from bipartisan members of Congress and countries in Eastern Europe, who warned that Russia could use the pipeline to "pressure and blackmail" its former client state Ukraine.

Hoping to assuage those fears, Biden and German Chancellor Angela Merkel reached an agreement in July to take action if Russia tries to "use energy as a weapon," set up a "green fund" to help Ukraine modernize its energy sector, and seek to ensure Russia continues to pay Ukraine around $3 billion in gas transit fees annually.

  • The Ukrainians view the deal as woefully inadequate, and had hoped for a pledge of military support or some kind of long-term national security commitment that would send a signal to Russia.
  • Ukrainian President Volodymyr Zelensky visited Biden at the White House last month in hopes of securing additional commitments, but came away disappointed.

What's next: Though construction is now completed, Nord Stream 2 won't start delivering gas until the pipeline is cleared by German regulators.

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