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US senators target more companies tied to Nord Stream 2 pipeline construction

June 05/2020

MOSCOW (MRC) --  A US Senate bill introduced June 4 aims to block completion of the 55 Bcm/year Nord Stream 2 natural gas pipeline from Russia to Germany by expanding existing sanctions to target more companies involved in building the project's final segment, said S&P Global.

While US sanctions in place since December targeted vessels laying underwater pipeline, the new measure would also take aim at vessel insurers and service companies carrying out surveying, trenching, welding and other tasks, said Kevin Book, managing director of ClearView Energy Partners.

The Gazprom-owned pipeline developer had hoped to bring the project online by the end of 2019, but permitting issues in Denmark and the threat of US sanctions have delayed completion.

"There is bipartisan and bicameral consensus that Russia's Nord Stream 2 pipeline poses a critical threat to America's national security and must not be completed," said US Senator Ted Cruz, Republican-Texas, who introduced the bill with Senator Jeanne Shaheen, Democrat-New Hampshire, and three other Republican senators.

The Protecting Europe's Energy Security Clarification Act would modify an earlier Nord Stream sanctions law signed by President Donald Trump in December as part of the fiscal 2020 defense budget.

Cruz said Russian President Vladimir Putin "continues to try to circumvent" the existing Nord Stream 2 sanctions, "and so this new bill will once and for all clarify that those involved in any way with installing pipeline for the project will face crippling and immediate American sanctions."

ClearView's Book said the latest measure appears to give the sanctions a faster trigger, making banned activities immediately sanctionable as soon as it is signed into law.

Book said the fiscal 2021 defense budget could serve as a legislative vehicle for the new sanctions, as it did last year Ц which would set up a "low-speed race between a slow pipe and slow bill."

"Recent history Ч to say nothing of election-year partisanship Ч suggests that it could take months, rather than weeks, for the Republican-led Senate and Democrat-led House [of Representatives] to reconcile disparate versions and reach agreement on a common text," Book said in a June 3 note.


A Russian pipe-laying vessel expected to complete the Nord Stream 2 link Ч the Akademik Cherskiy Ч remains inside the port of Mukran in northeast Germany, according to cFlow, Platts trade flow software. The remaining Nord Stream 2 pipe is stored at the port.

The Akademik Cherskiy has been widely billed as a replacement for the Allseas ships that laid most of the line before the US sanctions in December forced the Swiss company to halt work. Just 160 km (99 miles) of Nord Stream 2 is left to lay in Danish waters out of the total 2,460 km length.

The project encountered a fresh setback in May when it was refused an exemption from the amended EU Gas Directive on gas pipelines from non-EU countries. It also lost an appeal to the EU General Court against the pipeline being subject to the amended legislation.

Despite the setbacks and delays, S&P Global Platts Analytics expects Nord Stream 2 construction to resume in around two months' time and to take three to four months to complete.

"If no further delays impact this timeline, Nord Stream 2 would be operational in the first quarter of 2021," it said in a note May 29.

As MRC informed earlier, Gazprom neftekhim Salavat shut down its dioctyl phthalate (DOP) production for a scheduled maintenance. Market participants and a plant"s representative said Gazprom neftekhim Salavat took off-stream its DOP production for a long scheduled turnaround. The outage began on 12 May and will last for about 30 day.

According to MRC's ScanPlast report, Russian producers of unmixed PVC decreased capacity utilisation in April. However, Russia's overall PVC output totalled 351,000 tonnes in January-April 2020, up by 2% year on year.


mrcplast.com
Author:Anna Larionova
Tags:natural gas, PE, DOTP, gas pressure pipe, gas processing, Gazprom, Gazprom neftekhim Salavat.
Category:General News
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