Germany Expects Gas Pipeline Delay Before Completion in 2020

(Bloomberg) — The Nord Stream 2 gas pipeline should be completed in the second half of next year, despite the U.S. sanctions that prompted one of the companies involved to halt operations, although costs will rise, a senior German official said.

Switzerland’s AllSeas Group SA removed vessels that were laying the last section of the pipeline connecting Russia with Germany, which was just weeks away from completion, after U.S. President Donald Trump approved sanctions targeting the project.

The AllSeas decision will delay the pipeline and push up costs but it should be completed in the second half of 2020, Peter Beyer, the German government’s coordinator for trans-Atlantic issues, said Monday in an interview with Deutschlandfunk radio.

Trump’s decision was not a surprise but the sanctions are “completely incomprehensible” given the agreement between Russia and Ukraine on gas transit and “not a way to treat friends,” Beyer said.

Germany “would have expected a great deal more understanding from the American friends,” added the lawmaker, a member of Chancellor Angela Merkel’s Christian Democratic Union party.

Nord Stream 2 is set to ship as much as 55 billion cubic meters of Russian gas annually directly to Germany, doubling the capacity of the existing link. As many as 350 European companies are helping to build the pipeline, the German DIHK industry group estimates.

Trump has criticized Germany for not doing more to diversify imports away from Russia, while Merkel’s government argues that the $11 billion link is crucial to ensure energy security.

‘Incredible Provocation’

The consortium may resort to using Russian-owned ships to complete the Baltic Sea project, German lawmaker Timon Gremmels said at the weekend.

“There’s likely to be a Plan B but it’s hardly ideal to change your horse just before the finishing line,” said Gremmels, who is a spokesman on energy policy for Merkel’s junior coalition partner, the Social Democrats. “The sanctions are an incredible provocation but won’t halt the project.”

The pipeline’s completion would bring fresh supplies of gas to Europe’s already glutted market and make it more difficult for the U.S. to gain a bigger foothold in shipping cargoes of liquefied natural gas by tanker into Europe.

Beyer said the U.S. is trying to push its LNG on the continent and that the more expensive gas could push up prices for German consumers.

(Updates with German lawmaker from eighth paragraph)

–With assistance from Brian Parkin.

To contact the reporter on this story: Iain Rogers in Berlin at [email protected]

To contact the editors responsible for this story: Chad Thomas at [email protected], Raymond Colitt

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