Nord Stream pipeline

What is Nord Stream pipeline? What are the concerns regarding the pipeline? What is its significance to Russia and Europe? Read further to know more.

The Nord Stream pipeline will be shut, according to recent statements from the United States, if Russia attacks Ukraine.

However, due to the significance of the Nord Stream, European nations, led by Germany, were first hesitant to criticize it, even though it has since acknowledged that sanctions are still an option.

The longest undersea pipeline, Nord Stream, transports gas from Russia to Europe under the Baltic Sea.

Nord Stream

Two pipelines, each with two lines, make up Nord Stream.

• 2011 saw the launch of Nord Stream 1, which links Lubmin, which is close to Greifswald, Germany, with Vyborg in Leningrad, Russia.
• The Nord Stream 2 pipeline, which connects Ust-Luga in Leningrad with Lubmin, was finished in September 2021 and, after it is put into service, will have a capacity of 55 billion cubic metres of gas annually.
• The twin pipelines have a combined capacity of 110 billion cubic metres (bcm) of gas, which can be delivered to Europe for at least 50 years.
• The Exclusive Economic Zones (EEZs) of numerous nations, including Germany, Finland, Sweden, Denmark, and Russia, as well as the territorial seas of Germany, Denmark, and Russia, are traversed by the Nord Stream pipeline.
• The pipeline joins the NEL (North European Pipeline) and OPAL (Baltic Sea Pipeline) in Germany and the European grid.
• Ukraine has opposed it, stating that it will lose over USD 2 billion in transit payments once the pipeline is operational.
• Additionally, as long as Russian gas is transported via Ukraine, Russia is unlikely to intervene and destabilize the nation, and Europe will keep funding security initiatives there.
• As a result of the project’s bypassing of the existing pipelines that flow through them, nations like Poland and Belarus, which stand to lose transit payments as well, are opposed to it.

Also Read: Russia-Ukraine Conflict-ClearIAS

Concerns with the pipeline

There are a lot of concerns regarding the pipeline.

Germany’s Concern

• Environmentalists claim that it conflicts with German efforts to lessen reliance on fossil fuels and address climate change.
• Germany alleges that Nord Stream 2 violates German law and has suspended approval, therefore it has yet to start up. The initiative must also receive approval from the European Commission.

Strategic Objection

• The key strategic concern is that it will strengthen Europe’s reliance on Russia and, as a result, Russia’s influence in Europe.
• There are also worries that Russia will employ it as a geopolitical tool.
• Ukraine has opposed it, stating that it will lose over USD 2 billion in transit payments once the pipeline is operational.
• Additionally, as long as Russian gas is transported via Ukraine, Russia is unlikely to intervene and destabilise the nation, and Europe will keep funding security initiatives there.
• As a result of the project’s bypassing of the existing pipelines that flow through them, nations like Poland and Belarus, which stand to lose transit payments as well, are opposed to it.

Also read: The Union and its Territory: Part I (Articles 1- 4)

Significance for Europe and Russia

Both Europe and Russia have some significance with the Nord Stream pipeline

Europe

• Over 100 billion cubic metres (bcm) of natural gas are needed in Europe annually, with more than 40% coming from Russia.
• Europe’s reliance on gas imports has increased recently as a result of a decline in domestic gas output. There are no simple alternatives, making it harder to decrease dependency on Russian gas.
• Governments are under pressure since numerous European companies have invested a lot in Nord Stream 2. Finally, a decrease in Russian gas would result in an increase in already high local gas costs, which would not be well received domestically.

Russia

• Gas and oil sales in Russia, which has the greatest natural gas reserves in the world, make up over 40% of the nation’s budget.
• Because it eliminates the dangers involved in shipping gas through transit nations, eliminates transit fees, and grants direct access to Germany, its most important European consumer, Nord Stream 2 is vital.
• It increases Europe’s reliance on Russia while giving it a dependable client.

India and the EU Gas Crisis

• India’s exports, which are mainly for end-use, may be impacted by the decline in purchasing power in the EU27.
• Exports of intermediate items will be impacted by further manufacturing disruptions.
• “Even shipments of intermediate goods from the EU to India might be halted if production is seriously hampered.
• The cost of transportation using CNG as a fuel will be impacted by the current high gas prices. High sourcing costs for city gas distribution providers will have an impact on urban demand.
• A fresh wave of inflationary pressures on food and transportation prices will result from the present gas crisis in Europe.
• Given that the EU is already an importer of fertiliser due to limited domestic production, fertiliser and raw material costs are anticipated to remain high for FY23.
• Interest rates will increase in the current climate, however at varied rates from country to country.

Article Written by: Atheena Fathima Riyas