Eighty kilometres of open water does not seem far in the 3,100km journey that Russian gas must make from fields in the Siberian Arctic to consumers in northern Germany.
But closing the last gap in the Nord Stream 2 pipeline under the Baltic Sea is becoming an increasingly painful and potentially expensive problem for six of Europe’s biggest gas companies, which have pledged billions of euros in funding.
Mired in controversy since inception and condemned by critics as a political project that will deepen Europe’s energy reliance on the Kremlin, the poisoning of Russian opposition activist Alexei Navalny last month has intensified calls for EU governments to find a way to prevent it being finished.
Russian state group Gazprom is building the pipeline, with half of the €9.5bn cost funded by loans from Royal Dutch Shell, Austria’s OMV, Engie of France and German groups Uniper and Wintershall. All have found their investment imperilled by political woes and controversy.
In December, Washington imposed sanctions against companies involved in the pipeline’s construction, forcing Swiss pipe-layer Allseas to suspend its work with just 6 per cent left to install. In July, the sanctions were extended to all entities that have assisted the project, threatening the five co-financing companies.
Now, the poisoning of Mr Navalny with Soviet-developed military nerve agent novichok has led to demands from German politicians for chancellor Angela Merkel, the pipeline’s most important European backer, to end her support for the project.
James Henderson, head of the natural gas programme at the Oxford Institute for Energy Studies, said sanctions were the EU’s only available means to stop the project because it had already given regulatory clearance. “To go back on that would cause significant legal ramifications,” he said.
“For the companies that have provided the financing, that’s awkward — quite how you get your money back if the pipeline doesn’t operate is an interesting negotiation with Gazprom,” he added.
Even before the attack on Mr Navalny, who was airlifted to a Berlin hospital from Siberia and awoke from a 19-day coma on Monday, concerns about the project’s viability were mounting.
Nord Stream 2 would double the capacity of Russian gas pumped direct to Germany to 110bn cubic metres per year but has been controversial from the outset. Detractors, mainly in eastern EU states such as Poland, say it is designed to deprive Kyiv of transit fees by avoiding the existing pipeline network that runs from Russia through Ukraine into the EU.
The US has also claimed that it would make Germany and the EU more beholden to the Kremlin, and increase the amount of money Moscow earns from European consumers.
Uniper said last month that it may have to write off its loan to the project because of the increased US sanctions threat.
Andreas Schierenbeck, chief executive, said that while he believed the project would eventually be completed and Uniper would not be sanctioned: “We can’t exclude [the possibility of] such an extreme scenario. We can’t exclude that we could have further delays and that the pipeline might not be finished . . . We are worried about these sanctions.”
Anglo-Dutch energy major Shell said it had a “limited role in NS2 as a financial lender to the project. We don’t have a view on the possibility of sanctions but . . . Shell always complies with applicable sanctions and trade control measures”.
However, Wintershall chief executive Mario Mehren said last month he believed that the pipeline would be “commissioned in the near future, and we are also confident that all our loans will be repaid as contractually agreed”. As of April, Wintershall had contributed €730m of its pledged €950m to the project.
OMW declined to comment, while Engie did not respond to a request for comment.
“As a developer of a commercial investment, Nord Stream 2 AG cannot comment on political debates,” the pipeline’s development company told the Financial Times, adding that it “and the companies supporting our project remain convinced that the soonest possible commissioning of the pipeline is in the interest of Europe’s energy security”.
Aside from the sanctions threat, analysts have questioned the commercial rationale of the pipeline, which will add additional supply capacity to Europe’s gas market at a time of historically low prices and large oversupply caused by the pandemic’s hit to demand and the rise of liquefied natural gas production from countries such as the US.
Gazprom expects its gas sales to Europe and Turkey to fall by about 16 per cent this year to roughly 165 bcm, given lower consumption and higher supplies from rivals. Its existing pipelines to these markets have a total capacity of 219 bcm per year.
“For the moment, the asset isn’t an urgent priority in an operational sense because of the LNG glut that has flooded the market, the fall in demand, a warm winter, etc,” said Ronald Smith, executive director of BCS Global Markets in Moscow. “Right now there is more than enough capacity in the existing pipelines.”
However, that could mean a potential delay to the project enforced by European governments in retaliation for Mr Navalny’s poisoning would have less of a material impact on the companies paying for it.
Most forecasts predict that within three years, growth in Asian gas demand will eliminate excess LNG supplies and falling domestic gas production in Europe will increase the need for imports.
“Right now there are unlikely to be any consequences for European or German politicians who may decide to delay Nord Stream 2 for short-term political considerations,” Mr Smith said. “But no European government will want to turn off the heating in schools because the project didn’t get built.”
Gazprom, which has previously vowed to build the pipeline on its own if it has to, did not respond to a request for comment.
Russia’s energy minister Alexander Novak, who also sits on Gazprom’s board of directors, said last Monday that the pipeline would be finished and still made business sense. “This is a long-term project for many decades,” he told reporters. “Of course, the project is still relevant.”
Moscow has consistently said Nord Stream 2 is a commercial venture that would allow it to avoid supply disruptions such as those caused by political disputes between Russia and Ukraine that have sharply pushed up prices for European customers.
“It’s been one of those bizarre pipelines,” said Mr Henderson, adding: “Many people have said, why build this thing? What’s the economic case for Nord Stream 2, it’s surplus capacity? If tomorrow you said Nord Stream 2 is not happening, I’m not sure many traders would bat an eyelid.”
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – NDP Leader Jagmeet Singh says he will not be taking advice from Pierre Poilievre after the Conservative leader challenged him to bring down government.
“I say directly to Pierre Poilievre: I’m not going to listen to you,” said Singh on Wednesday, accusing Poilievre of wanting to take away dental-care coverage from Canadians, among other things.
“I’m not going to listen to your advice. You want to destroy people’s lives, I want to build up a brighter future.”
Earlier in the day, Poilievre challenged Singh to commit to voting non-confidence in the government, saying his party will force a vote in the House of Commons “at the earliest possibly opportunity.”
“I’m asking Jagmeet Singh and the NDP to commit unequivocally before Monday’s byelections: will they vote non-confidence to bring down the costly coalition and trigger a carbon tax election, or will Jagmeet Singh sell out Canadians again?” Poilievre said.
“It’s put up or shut up time for the NDP.”
While Singh rejected the idea he would ever listen to Poilievre, he did not say how the NDP would vote on a non-confidence motion.
“I’ve said on any vote, we’re going to look at the vote and we’ll make our decision. I’m not going to say our decision ahead of time,” he said.
Singh’s top adviser said on Tuesday the NDP leader is not particularly eager to trigger an election, even as the Conservatives challenge him to do just that.
Anne McGrath, Singh’s principal secretary, says there will be more volatility in Parliament and the odds of an early election have risen.
“I don’t think he is anxious to launch one, or chomping at the bit to have one, but it can happen,” she said in an interview.
New Democrat MPs are in a second day of meetings in Montreal as they nail down a plan for how to navigate the minority Parliament this fall.
The caucus retreat comes one week after Singh announced the party has left the supply-and-confidence agreement with the governing Liberals.
It’s also taking place in the very city where New Democrats are hoping to pick up a seat on Monday, when voters go to the polls in Montreal’s LaSalle—Émard—Verdun. A second byelection is being held that day in the Winnipeg riding of Elmwood—Transcona, where the NDP is hoping to hold onto a seat the Conservatives are also vying for.
While New Democrats are seeking to distance themselves from the Liberals, they don’t appear ready to trigger a general election.
Singh signalled on Tuesday that he will have more to say Wednesday about the party’s strategy for the upcoming sitting.
He is hoping to convince Canadians that his party can defeat the federal Conservatives, who have been riding high in the polls over the last year.
Singh has attacked Poilievre as someone who would bring back Harper-style cuts to programs that Canadians rely on, including the national dental-care program that was part of the supply-and-confidence agreement.
The Canadian Press has asked Poilievre’s office whether the Conservative leader intends to keep the program in place, if he forms government after the next election.
With the return of Parliament just days away, the NDP is also keeping in mind how other parties will look to capitalize on the new makeup of the House of Commons.
The Bloc Québécois has already indicated that it’s written up a list of demands for the Liberals in exchange for support on votes.
The next federal election must take place by October 2025 at the latest.
This report by The Canadian Press was first published Sept. 11, 2024.
Montreal Mayor Valérie Plante is defending her decision to turn off comments on her social media accounts — with an announcement on social media.
She posted screenshots to X this morning of vulgar names she’s been called on the platform, and says comments on her posts for months have been dominated by insults, to the point that she decided to block them.
Montreal’s Opposition leader and the Canadian Civil Liberties Association have criticized Plante for limiting freedom of expression by restricting comments on her X and Instagram accounts.
They say elected officials who use social media should be willing to hear from constituents on those platforms.
However, Plante says some people may believe there is a fundamental right to call someone offensive names and to normalize violence online, but she disagrees.
Her statement on X is closed to comments.
This report by The Canadian Press was first published Sept. 11, 2024.
