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ENERGY

Germany goes ahead with gas pipeline despite U.S. protests

US President Donald Trump may loathe it, but the Russia-Germany gas pipeline Nord Stream 2 that runs under the Baltic Sea is set to be completed by the end of the year, its operators predict.

Germany goes ahead with gas pipeline despite U.S. protests
Construction on the Nord Stream 2 in Lubmin, Mecklenburg-Western Pommerania. Photo: DPA

This week the consortium led by Russian energy giant Gazprom took international media to the Baltic coast town of Lubmin where the existing Nord Stream 1 and its new parallel pipeline terminate.

“The main installations have been completed, the shut-off valves have been  installed, so we can assume that the project will be completed by the end of 2019,” said project spokesman Jens Müller.

The €11 billion project is set to double Russian gas shipments to the EU's biggest economy.

SEE ALSO: Germany reaches compromise deal over Nord Stream II

This has sparked concerns about Western Europe's increasing dependance on Russian gas, as well as Moscow being able to increase pressure on Ukraine as it is no longer as reliant on the country for transit of supplies.

Washington has bitterly opposed the project, with Trump charging in angry tweets last year that it made Germany a “captive” of President Vladimir Putin's Russia.

Chancellor Angela Merkel's government, anxious to placate Trump, has meanwhile agreed steps to boost German purchases of US liquefied natural gas.

Economy Minister Peter Altmaier, Merkel's close confidant, Wednesday said Germany would pave the way for the construction of new LNG port terminals to “boost competition between different gas imports”.

Pharaonic project 

Meanwhile, on the edge of a pine forest at Lubmin, Mecklenburg-Western Pommerania state, hundreds of workers with heavy construction equipment have been labouring at the pipeline's sandy landing site.

Other crews are busy offshore on a fleet of 20 ships to lay the 1,230 kilometre steel-and-concrete pipeline through the maritime territories of Russia, Finland, Sweden, Denmark and Germany.

The pipeline being laid out in the nearby community of Groß Polzin. Photo: DPA

The pharaonic project still faces an obstacle as Denmark has so far failed to give approval to the controversial and geopolitically sensitive pipeline.

“We have good reason to think” that the green light will be given “in the near future,” said Müller.

Since its inception, Nord Stream 2 has caused controversy.

Proponents say it will help secure Europe's gas supply at lower prices by sending an additional 55 billion cubic metres per year.

Several Eastern European countries have opposed the project which effectively bypasses them and deprives them of lucrative transit fees.

They charge that Moscow in particular aims to isolate Ukraine. 

The country has long key for the transit of Russian supplies to Western Europe, but price disputes between Moscow and Kiev have led to several disruptions of supplies to other European countries. 

Ties between Kiev and its Soviet-era master Moscow were then shredded after a popular uprising in Ukraine ousted a Kremlin-backed regime in 2014. Russia retaliated by annexing Crimea and supporting a separatist uprising in the east of the country.

Combined with the planned TurkStream pipeline across the Black Sea, Nord Stream 2 would theoretically allow Russia to bypass Ukraine in providing gas to Europe.


US sanctions threat

Merkel long insisted Nord Stream 2 is a “purely economic project” but has more recently given assurances that Ukrainian interests will be protected.

In the third quarter of 2018, pipelines through Ukraine still accounted for 48 percent of Russian gas shipments to Europe, according to the European  Commission.

The consortium insists that Ukraine will retain its role as a transit country.

Currently out of an annual total of 170 billion cubic metres of Russian gas shipped to the European Union, 93 billion cubic metres pass through Ukrainian pipelines.

“It's simple mathematics,” said Müller, pointing out that since Nord Stream 2 will be able to handle a maximum of 55 billion cubic metres per year, Ukrainian pipelines will still be needed.

A legal threat hovers over the project, which also includes Germany's Wintershall and Uniper, Dutch-British Shell, France's Engie and Austria's OMV. 

Trump's US ambassador to Germany, Richard Grenell, in January warned that companies operating in the Russian energy export pipeline sector are in danger of US sanctions.

Its proponents argue that Nord Stream 2 does not fall under a 2017 law targeting Russia, the Countering America's Adversaries Through Sanctions Act. 

Questioned by AFP about the sanctions threat, the German government pointed to the “private business” nature of Nord Stream 2, while the consortium declined to “comment on political decisions”.

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BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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