French energy Corporation Engie intends to support the project “Nord stream-2,” regardless of U.S. sanctions. This statement was made Chairman of the Board of Directors of gérard Mestrallet on the sidelines of the Gaidar economic forum in Moscow.
According to Mestrallet, Gazprom signed an agreement with partners, including Engie, much earlier than the introduction of new U.S. sanctions, the bill of which the President is Donald trump signed in August 2017. Therefore, according to the businessman, there is no reason for concern.
Gazprom, it seems, is also confident that the gas pipeline project will be realized until the end. The Corporation intends to increase investments in the construction of “Nord stream-2” to 114.5 billion roubles, which is 11.8% more than in 2017. Reportedly, additional funding will be needed to expand capacity of the GTS, in addition, in the initial construction project was not included funds for the objects of the Unified gas supply system (UGSS) of Russia.
Recall that the latest sanctions package allows the U.S. President to impose sanctions on individuals and companies who invest in the construction of Russian export pipelines over $ 5 million a year or $ 1 million lump-sum, as well as providing technological or even consulting support.
This caused resentment in the European Union, and after consultation with partners, the state Department issued a clarification, saying that the sanctions apply only to projects initiated after August 2017. However, the threat of sanctions for future projects remains.
Engie determination to continue on the “Nord stream-2”, despite the sanctions, gives reason for optimism. However, it’s likely to be tested before the end of the month, when the US will introduce another sanction report.
As stated by the head of the U.S. Treasury Steven Mnuchin 11 Jan, Washington is preparing to adopt a package of restrictive measures against some Russian citizens. U.S. Ambassador Jon huntsman confirmed that a report will be prepared by January 29, but it is too early to say who will fall under the new restrictions.
Technically we are not talking about new restrictions, and on the enforcement of section 241 of the August law that requires sanctions against Russian businessmen “close to the regime”. According to the newspaper “Kommersant”, the list can get about 50 people.
But it is possible that sanctions can be widened to include not only individuals. Democrats, for example, actively calling for tighter restrictions. Russian Deputy foreign Minister Sergei Ryabkov said that before the end of January will feature two anti-Russian of the report of the administration of the President of the United States Congress in fulfilling CAATSA (the law “On combating the enemies of America by sanctions”).
According to Sergei Ryabkov, reports suggest the attempt by Washington to influence the Russian internal situation ahead of presidential elections. Breakdown or inhibition of such an ambitious project as “Nord stream-2” before the election would be a serious negative background information.
— New sanctions pursued by the United States, will be focused mainly on specific Russian officials — says a leading analyst Amarkets Artem Deev. — They should not affect the “Nord stream-2”. If the Americans want to impose sanctions against European companies that are involved in the construction of the pipeline, it will be a desperate attempt to prevent its construction and to recognize their own impotence and inability to maintain healthy competition in the struggle for the European gas market.
— The US has tried to extend the law on sanctions on the SP-2, but as the draft American companies are not involved, the effect of this was not, — reminds chief economist at BCS global markets, Vladimir Tikhomirov. Especially due to the fact that such a move was opposed by the Europeans. So to date, the project and its participants may be subject to sanctions if they sign a new agreement in the framework of the project, that is after the date of entry into force of the US law on sanctions (August 2, 2017). All prisoners are informed of the transaction and provided in accordance with the funding under the act is not covered.
For the “Nord stream-2” which means that the risks of the project, in fact. Of course, if the United States decides to toughen sanctions against the project, but then they run the risk that the EU will simply refuse to comply with these restrictions and then their action will be reduced to zero.
“SP”: — That is the potential new sanctions are not much of a threat are?
— Not quite. If at the end of January will be announced about a significant expansion of sanctions as against some Russian individuals or companies, and in Russian government debt — that is, no doubt, will be negative for the market and investors. If the report of the Ministry of Finance will limit the potential list of new sanctions, but without their instant introduction for the market and investors rather, it is neutral news.
Dean of the faculty “Sociology and political science” Financial University under the government of the Russian Federation Alexander Shatilov no doubt that Washington will do anything to “convince” Europe to abandon the “Nord stream-2”
— The interests of the Europeans, the Americans consider rare because they are not key to foreign policy and foreign economic activity of the United States. It is naive to think that Washington will take into account the arguments of its European allies.
Now the United States launched a major campaign, in fact the information war against Russia. They will do anything to bend the Europeans and force them to abandon cooperation with Russia. All these forthcoming reports are intended to demonize the Russian elite and business, and, therefore, a major economic and investment projects.
The Americans clearly will prepare a report in a very rigid manner, thicken the paint to the maximum. They are trying to create a background on which cooperation with Russia will be seen as totally unacceptable and reprehensible. The Europeans in such circumstances would be extremely difficult to act contrary to the interests of Washington.
“SP”: — But in August, the European officials rather sharply expressed against energy sanctions, not to mention the business…
— Although the European business is focused on cooperation with the Russian Federation, the political elite is too tied to Washington, they actually are not European, and Pro-American politicians. Thanks to their efforts in 2014, the European Commission adopted the first package of restrictive against Russia, after which began the “war of sanctions”, which inflicted heavy losses to the European Union.
But Americans have nothing to loss on its European partners, especially when at stake is influence in the world. Now, I think Washington is doing everything to demonize the environment of Vladimir Putin and the Russian business elite. They will try to escalate the situation and keep the hype, especially on the eve of elections.
But on the other hand, they will use all formal and informal levers of pressure to force the Europeans to curtail undesirable, from the point of view of Washington, joint project with Russia. The European business will resist and attempt to subvert their political elites, but not the fact that the lobbying capacity will be sufficient for this.
Expert-analyst GK “Finam” Alexey Kalachev believes that the determination of the Europeans will be key to the fate of the pipeline.
— Investors and partners in the “Nord stream-2”, of course, interested in the project, as it promises them a decent profit. They, as project participants, will receive payments from the gas flow, even regardless of the volume of this pumping. This is a very good investment. Therefore, they will by all means advocate for the continuation of this project until such time as the sanctions start to affect them.
Joint business with Gazprom is not the only business of these large transnational corporations. If the sanctions somehow limit the possibility of their participation in the “Nord stream-2”, they will seek mechanisms that will help them get around and not fall under the restrictions. If in front of them will be a choice of “either-or”, of course, they will prefer not to participate in the project than to fall under the sanctions and deprived of other global projects, which have much more.
“SP”: — Can in Washington to go to extreme measures to expressly prohibit Western companies to have some relevance to the “Nord stream-2”?
— It seems to me that, despite the threatening rhetoric, the US administration quite reasonable people. If the US will see serious resistance from the part of Europe, they will not spoil relations with its key partners. They are limited to rhetoric and sanctions against the “Nord stream-2” will be of a moderate nature. If resistance or it will be insufficient, the Americans may be able to afford stringent measures in respect of the project until its prohibition or the imposition of sanctions on everyone who applies to him.
“SP”: — That is the fate of the pipeline now depends on the Europeans and their positions?
— Of course, though, because the gas pipeline goes to Europe. If the Europeans this gas is not needed, then all actions “Gazprom” do not make sense, but if necessary they will defend their interests.
Soon the EU will have to define their positions. We see that in Europe too, not all by far. On the one hand, they benefit a relatively inexpensive and stable supplies from Russia. On the other, they are making effort not to depend on a single supplier, i.e. Gazprom. They are interested in diversification of gas supplies, so you can do consciously agree to the restriction. Especially if they have an alternative.
