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Latest IENE Analysis Discusses the Impact of Anti-Russia Sanctions on Nord Stream 2

Latest IENE Analysis Discusses the Impact of Anti-Russia Sanctions on Nord Stream 2Few days ago, IENE sent to its members the latest issue of its monthly analysis (September 2017 No. 243), which focuses on the impact of latest anti-Russia sanctions on the implementation of Nord Stream 2 gas pipeline and how this may affect the gas supply situation of the South East European region

Few days ago, IENE sent to its members the latest issue of its monthly analysis (September 2017 No. 243), which focuses on the impact of latest anti-Russia sanctions on the implementation of Nord Stream 2 gas pipeline and how this may affect the gas supply situation of the South East European region.

As it became known, the new package of anti-Russia sanctions introduced by the US Congress and signed by President Donald Trump in early August contains, among others, measures that target Russia's energy projects, including those implemented in Europe such as the Nord Stream 2 and the European leg of Turkish Stream. There is wide speculation among energy experts and senior European officials that the new restrictions are aimed at squeezing Russian gas out of the European market to the benefit of US LNG supplies instead. In addition, the monthly analysis highlights the reactions against the implementation of the Nord Stream 2 as well as the reactions about the sanctions.

Admittedly, the EU’s domestic gas production is in rapid decline and in order to meet demand, the EU needs to secure new gas supplies. Political considerations apart, the Nord Stream 2 pipeline does precisely this as it will help ship additional Russian gas supplies to the EU internal market, substantially enhancing the EU’s long-term energy security, helping maintain its competitiveness and supporting its climate goals.

In particular, the entry point of the Nord Stream 2 gas pipeline into the Baltic Sea will be the Ust-Luga area of the Leningrad Region. Then the pipeline will stretch across the Baltic Sea. Its exit point in Germany will be in the Greifswald area close to the exit point of Nord Stream. The route covers over 1,200 kilometers (see Map 1). With Europe’s domestic gas production projected to halve in the next 20 years, Nord Stream 2’s twin pipeline system will help Europe to meet its future gas import needs, with the total capacity of its two strings to transport 55 billion cubic metres (bcm) of gas per year, enough to supply entirely 26 million European households and businesses.


IENE’s latest monthly analysis points out that in order to avoid the pressure and limitations imposed by the US sanctions, European investors might be forced to look elsewhere for funding the project. Asian banks appear a realistic alternative, as they are not that exposed to the US market, while US law does not prevent the holding company from borrowing in foreign markets to finance the project.

IENE EVENTS 22nd National Energy Conference "Energy & Development 2017"

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