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Wintershall Dea 'confident' Nord Stream 2 to be commissioned in near future: CEO


German company is co-financier of 55 Bcm/year gas pipeline

Just 160 km left to lay of Nord Stream 2 in Danish waters

US sanctions threaten completion of controversial line

  • Author
  • Stuart Elliott
  • Editor
  • Alisdair Bowles
  • Commodity
  • Natural Gas

London — Germany's Wintershall Dea -- which is co-financing the 55 Bcm/year Nord Stream 2 gas pipeline from Russia to Germany -- is "confident" the project will be commissioned soon, CEO Mario Mehren said Aug. 19.

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Just 160 km of Nord Stream 2 remains to be laid in Danish waters, but the threat of US sanctions against companies involved in laying the pipeline has seen work suspended since the end of last year.

Wintershall Dea is one of five European energy companies -- along with France's Engie, Austria's OMV, Anglo-Dutch Shell, and Germany's Uniper -- that have co-financed the project, each committing to pay Eur950 million.

"Wintershall Dea as a financing party to the project is not impacted so far by any sanctions," Mehren said on an analyst call following the release of the company's Q2 results.

"We remain confident that this project, which is important for Europe, is being commissioned in the near future, and we are also confident that all our loans will be repaid as contractually agreed," he said.

Mehren's upbeat tone was in contrast to comments made by Uniper on Aug. 11.

The German company said that with the US intensifying its efforts on targeted sanctions against Nord Stream 2, "the probability of a delay or even non-completion of the pipeline is increasing."

"In case the project can ultimately not be completed, Uniper may have to impair the loan provided to Nord Stream 2," it added.

US sanctions

In July, the developer of Nord Stream 2 said the investments needed to complete the pipeline could be blocked if the US imposed sanctions against companies involved in the project.

In a hardening of its position against Russian energy export projects, the US State Department on July 15 updated part of its Countering America's Adversaries Through Sanctions Act (CAATSA) legislation from August 2017.

Companies involving in building the Nord Stream 2 link can now be targeted, whereas before they were exempted from potential measures under the CAATSA legislation.

Expanded sanctions against the project are also now under consideration that would target more companies involved in laying the line's final segment, including service providers and insurers.

An EU delegation reportedly communicated its position to the US State Department on Aug. 12, supported by 24 of the bloc's 27 members, that the sanctions are in breach of international law.

Nord Stream 2 is crucial to Russia's plans to scale down from 2021 the use of the Ukrainian transit corridor in its gas supplies to Europe.

However, it remains unclear when and how the Nord Stream 2 operating company will lay the final kilometers of the pipeline in Danish waters.

Under the Danish permit for laying the pipeline, Nord Stream 2 can use either vessels with anchors or those with dynamic positioning capabilities such as the Akademik Cherskiy to complete the pipelaying.

One vessel that had been considered for laying the pipe was the Fortuna, but Russian media reported in early August that its lessee MRTS had said it did not intend to provide the vessel to complete Nord Stream 2.

MRTS could not be reached for confirmation of the report first carried by Russian media outlet RBC.

Nord Stream 2 has said it will announce its plans for laying the pipeline in "due course" but must first submit an updated work schedule to the Danish authorities.

Russian foreign minister Sergey Lavrov said Aug. 11 he believed the pipeline would be completed in "the near future."