Germany's Russian-backed pipeline ‘justified’ despite US concern

Germany's Russian-backed pipeline ‘justified’ despite US concern

Germany’s economy minister said he believed the Russian-backed Nord Stream 2 pipeline can go ahead while preserving Ukraine’s vital interests, but that Berlin is also in talks to diversify its energy supply with liquefied natural gas.

President Donald Trump in July accused Germany of being a “captive” of Russia due to its energy reliance and urged it to halt work on the €9.7bn Russian-led Nord Stream 2 gas pipeline that is to be built in the Baltic Sea.

Berlin and Moscow have been at odds since Russia annexed Crimea four years ago, but they have a common interest in the Nord Stream 2 project, which will double the capacity of the existing Nord Stream 1 route from next year.

Washington is concerned the pipeline, which will bypass Ukraine by running under the Baltic Sea, will strip Ukraine of important transit revenues and says Moscow is using the project to divide Europe.

“Personally, I believe that this project can be justified if Ukraine’s vital interests are preserved at the same time,” German Economy Minister Peter Altmaier told Reuters.

“And one of these vital interests is that even after 2019, substantial gas transit through Ukraine will take place from Russia. There are discussions about this at the moment,” he said, adding that the detail of the talks was “very difficult”. Ukraine derives up to 3% of its GDP from transit charges.

We will not reduce dependence on Russia by torpedoing a pipeline such as Nord Stream 2 and then sourcing gas from Russia from other pipelines,” Mr Altmaier said. “Greater independence is only conceivable if, in addition to the long-term supply of gas, we also create an LNG infrastructure in Germany.

Washington has touted liquefied natural gas (LNG) delivered by US companies as an alternative to Russian gas. Mr Altmaier said German government members were agreed they wanted to build the infrastructure to import LNG soon, and “we are currently in the process of clarifying the location issue with private investors”.

On Brexit, Mr Altmaier said Britain’s withdrawal could not be renegotiated but the EU was ready “to provide clarification”.

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