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Current Affairs

Importance of Nord Stream

Date: 02 February 2022 Tags: Miscellaneous

Issue

The Russian aggression near Ukraine border has brought back the focus on Nord Stream gas pipeline.

 

Background

Since the last few months, Russia has assembled troops near the eastern border, threatening with a possible invasion.

 

Details

  • The Nord Stream pipeline is owned by Russian energy giant Gazprom. It will run underground between Vyborg in Leningrad to Lubmin near Greifswald, Germany. 

  • The gas is extracted from Bovanenkovo oil and gas condensate deposit in Western Siberia. It will not transit from other countries.

 

Nord Stream

  • The Nord Stream pipeline consists of two phases. The Nord Stream 1 was completed in 2011 while the Nord Stream 2 is under construction.

  • The pipeline has a combined capacity to transport total of 110 billion cubic metres (bcm) of gas a year to Europe for at least 50 years. 

  • The pipeline passes through EEZ of Russia, Finland, Sweden, Denmark and Germany, apart from territorial waters of Germany, Denmark and Russia.

 

Objections

  • Environmentalists argue that it will create further dependence of Germany on fossil fuels, which will impact its fight against climate change.

  • The US says that the pipeline will make Europe further dependent on Russia for energy security. Russia could use it as a geopolitical weapon.

  • Countries like Ukraine, Poland and Belarus are also opposing it as they will lose billions as transit fees due to bypassing.

  • The US has threatened to impose sanctions on Nord Stream if Russia invades Ukraine. Germany has also said that it may be forced to impose sanctions.

 

Importance for Europe

  • The domestic production of natural gas has been outpaced by demands. Since there are no easy replacements, dependence on Russian gas is immense.

  • The natural gas is important for heating homes, factories, and offices in the harsh, long European winters and also for generation of electricity.

  • There is no proper infrastructure for importing gas from countries such as Qatar and US. The shipping method also looks uncertain.

  • For Russia, the gas pipeline is one of the major revenue generators. It cuts operation costs and makes Europe further dependent on it.

 

Way ahead

  • The US aims to use the Nord Stream pipeline as a bargaining chip to deescalate Russian aggression in Ukraine.

  • But the diverging opinion between countries has brought out the difference in open. Russia will try to exploit this to its advantage.