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German energy minister says Russian gas pipeline necessary to secure European energy supply

01 October 2018

Thomas Bareiss, Germany’s state secretary for energy, told an energy conference in London that the Nord Stream 2 gas pipeline, from Russia to Germany, is important to secure German energy supplies into the future. He also told the Bloomberg NEF Future of Energy summit that Russia was a safe and reliable provider. US President Donald Trump earlier threatened companies working on the project with sanctions.

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Pipelaying in the Baltic Sea began in September and the pipeline should become operational at the end of 2019.

Nord Stream 2 will double the existing Nord Stream 1 capacity from 55 billion cubic metres of gas a year. It is owned by Russian state-controlled Gazprom, which is taking on half of the planned costs of 9.5 billion euros ($11 billion). Russian gas currently accounts for 4.3% of German power generation.

In July, US President Donald Trump severely criticised Germany for making itself "completely dependent" on Russian gas. He has also threatened to sanction European companies who invest in the pipeline. The US Administration says it is better that Germany should get its gas from an ally, rather than a foe.

Moscow has accused Washington of trying to kill the pipeline in order to force European countries to import US LNG, a byproduct of the country’s surplus of shale gas.

 “I know the US has concerns ... but it is not so easy. For Germany, Russia has always been a safe and reliable supplier for gas,” Bareiss told the conference. “Nord Stream 2 should go on because the pipeline secures energy supply in Europe.”

Other than Gazprom, Nord Stream 2’s other shareholders are Germany’s Uniper and Wintershall, Anglo- Dutch group Royal Dutch Shell, France’s Engie and Austria’s OMV.

Germany is embarking on an expensive energy transition to replace coal and nuclear power capacity with low-carbon energy, and gas will be a key transition fuel.

Poland and Denmark oppose the project, and may refuse permission for the pipeline to me laid in their territorial waters. This would necessitate a longer route through international waters.

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