How Nord Stream 2 Got Stuck in Russia-Ukraine Limbo

The newly completed Nord Stream 2 pipeline under the Baltic Sea has come tantalizingly close to being able to pump billions of cubic meters of Russian gas to the European Union. Now its future is in limbo amid tougher sanctions from the U.S. and Europe. The link between Russia and Germany runs parallel to the existing Nord Stream pipeline that’s been fully operational since 2012. The launch of the new link was already delayed by earlier U.S. efforts to block its completion. Russia’s invasion of Ukraine further complicates matters, and the new pipeline may lie dormant on the Baltic seabed for years.

U.S. President Joe Biden expanded sanctions against Russia on Feb. 23, with new penalties targeting the builder of the pipeline and its corporate leadership. The U.S. sanctions hit Nord Stream 2 AG. German Chancellor Olaf Scholz said just before the Russian attacks that President Vladimir Putin’s recognition of two separatist republics in the east of Ukraine had materially changed the situation so that “no certification of the pipeline can happen right now.” Without it, he told reporters, the gas link “cannot go into operation.” Scholz effectively froze the approval process by having the Economy Ministry withdraw its assessment that the project doesn’t pose a threat to security of supply. Economy Minister Robert Habeck said the pipeline is unlikely to start up in the medium term.