Germany brushed aside US concerns about a major natural gas pipeline that will deliver Russian gas to Europe, suggesting President Donald Trump’s administration appears to be protecting its own interests.
German Economy Minister Peter Altmaier defended the planned Nord Stream 2 pipeline as Chancellor Angela Merkel meets President Vladimir Putin in Russia. The US warned it may impose sanctions to prevent Russia’s gas export monopoly Gazprom PJSC from completing the Nord Stream 2 link under the Baltic Sea.
Russia supplies more than a third of Europe’s gas demand, and its market share is growing as nations led by Germany close their most polluting power stations. Merkel is scrapping coal and nuclear power, making gas increasingly the most important fuel. Altmaier said US efforts to block the link seem to be aimed at protecting Europe as a market for exports of gas in its liquid form from America.
“They are looking for markets, which we can understand, and they can land it here easily,” Altmaier said in an interview with German TV station ARD’s Morgenmagazin program. “But it is much more expensive than pipeline gas, so blocking Nord Stream 2 on its own won’t guarantee exports.”
The remarks underscore a deepening rift between the US and its allies over how to balance efforts to isolate Russia economically with the need to maintain energy supplies. While gas in the US is about third of the cost of the European equivalent, it ends up being more expensive when costs are added to liquefy and ship it on tankers to terminals from Belgium to the Netherlands.
Royal Dutch Shell Plc, BASF SE’s Wintershall unit, Uniper SE, OMV AG and Engie SA are helping finance the Gazprom project, which would be the second link directly from Russia to Germany under the Baltic Sea. The concern is that Russia will use the expanded link to bypass Ukraine, currently the main route for gas transiting from Russia to western Europe. That would deprive Ukraine of crucial revenue.