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    German Gas Lobby Rebuts US Ambassador

Summary

It is for Europe to manage its gas supplies, it says.

by: William Powell

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German Gas Lobby Rebuts US Ambassador

The German gas lobby group Zukunft Erdgas said January 14 that "European gas companies must be able to decide their investments confidently."

The statement followed German media reports that the US ambassador to Berlin, Richard Grenell, had sent a number of letters to German companies participating in the Gazprom-led Nord Stream 2 project. These would include BASF and Uniper, each contributing a tenth of the €9.5bn ($10.9bn) cost. Other German companies have contributed in other ways, by selling linepipe, services and so on. The other companies backing the project financially are Austrian OMV, French Engie and Anglo-Dutch major Shell.

These letters hinted – not for the first time – that the US could impose sanctions for supporting the Nord Stream 2 gas pipeline construction project. The ambassador's spokesperson said that Grenell’s letters should be perceived not as a “threat”, but as a clear expression of US policy.

This expression of anti-Russian sentiment is mirrored by some US lobby groups, who are as keen as Gazprom is to sell gas to Europe, although they risk being beaten on price by the Russian monopoly.

Zukunft Erdgas said that LNG has significantly increased the number of producers available to Europe, whose LNG terminals can already import around 45% of EU gas demand. An LNG terminal is also to be built in Germany in order to further diversify its sources of supply.

"Basically, every investment in gas infrastructure strengthens the security of supply of Germany and Europe. Due to the variety of import routes, we secure access to the cheapest providers. Sanctions against individual energy infrastructures not only curtail the sovereignty of Europe. They also jeopardize the energiewende (transition) in Germany, as it contradicts the growing demand for natural gas as a cheaper, low carbon energy," its statement said.

The view in Berlin is that NS2 is a commercial project, relying on private money, and that it is not for the US to comment on how Europe, an import-dependent region, manages its supplies. However, some gas must continue to flow through Ukraine, says the chancellor, Angela Merkel. The Swiss-based operator Nord Stream 2 AG says additionally that the line will shorten the distance to market from the growing gas production facilities on the Yamal Peninsula in the far north. And the pipelines crossing Ukraine are old and amortised.

NS2 is already being laid on the Baltic Sea bed and is due to start deliveries late this year. But one section of the route is uncertain until Denmark decides whether or not to allow it to cross its territorial waters, as NS1 does.