Putin Takes Nord Stream 2 Victory Lap: "Either Buy Cheaper, Cleaner Gas From Us" Or "Dubious" US Shale

Tyler Durden's Photo
by Tyler Durden
Saturday, Jun 05, 2021 - 07:35 AM

On Friday Russian President Vladimir Putin hailed the successful reaching of a major milestone in the Nord Stream 2 Russia to Germany natural gas pipeline despite an aggressive US sanctions campaign toward thwarting the project which began under the Trump administration (and ironically somewhat softened under Biden, at least on the German side), which will imminently bring the controversial project to completion.

In an address to the St. Petersburg Economic Forum, which is often referred to as "Russia's Davos", Putin said "I am pleased to say that today, just two-and-a-half-hours ago, we have completed laying the pipes for the first section of Nord Stream 2, and works are advancing on the second segment."

Just days ago TASS cited the governor of the Leningrad region, where the pipeline originates, as saying testing will begin as early as next week. At the end of March, Russia's energy giant Gazprom had declared it to be 95% complete. 

Via AP

Putin's Friday declaration was widely perceived to mean completion is now imminent and that Washington's best efforts to halt it have been defeated. "The gas pipeline, including the segment under the sea, has already been completed," Putin added in the statements. "There are two sections, from the German side and the Russian side – they have to be welded – and then it will be finished" - after which  Gazprom "is ready to start filing Nord Stream 2 with gas," he affirmed. Putin gave the second line "a month or two" till completion.

Reuters noted upon the speech that Gazprom shares went up 0.6 percent, reaching 273.80 rubles (or $3.74), which hasn't been topped since mid-2008.

Notably Putin took the opportunity to take a big swipe at Russia's and the pipeline's enemies, saying that the "propaganda is still raging" against "cheaper gas" which NS2 will supply...

This is a purely commercial, economic project. Those who believe that this is us trying to bypass other transit players are wrong. The route across the Baltic Sea from Russia to Germany is shorter than if we had to use other countries like Ukraine, Slovakia or Austria. It’s cheaper and shorter to transport gas via this route. The end consumer — utility companies, citizens, business — get gas at cheaper prices than if it had to go through other countries. But the propaganda is still raging.

Central to Washington's rationale for opposing the pipeline from the beginning, which served to worsen relations with ally Germany, was that it intentionally cut Ukraine out of valuable transit fees altogether. The US has long charged Moscow with seeking to "punish" Kiev via the NS2 project.

Predictably, the speech immediate provoked angry reactions from Russia hawks on both sides of the aisle... 

On this note, Putin conceded that for now Russia "will continue pumping 40 billion cubic meters of gas via Ukraine a year in line with the existing five-year contract," according to Reuters. 

Further taking the opportunity for a victory lap amid the now clearly accomplished project and with it increased Russian clout in Europe's energy policy, Putin underscored in another shot across the US bow: "Here’s the decision. Either you buy cheaper, cleaner gas from us, or you buy a product which is environmentally dubious [U.S. shale gas]. Fracking is environmentally harmful. Nord Stream 2 is cleaner, cheaper and more environmentally friendly."