Putin Touts Progress in Gas Pipeline Targeted by U.S.

Russian President Vladimir Putin hailed the completion of a key stage in the construction of a gas pipeline to Germany that the U.S. targeted for sanctions, ahead of his summit with counterpart Joe Biden.

“I’m happy to say that today, two and half hours ago, the pipelaying for the first line of the Nord Stream 2 gas pipeline was successfully completed,” Putin said Friday in his address to the St Petersburg International Economic Forum. “Work on the second line is continuing.”

While the section still needs to be welded, that will probably take about 10 days, and Gazprom PJSC is ready to start filling the link with natural gas, Putin said. The second line may be finished within two months, he said.

Putin’s comments caught Gazprom PJSC’s financial partners in the pipeline project off-guard.

“We were all surprised that construction of line one at Nord Stream 2 was finished so early,” Rainer Seele, Chief Executive Officer at Austria’s OMV AG, told reporters in St Petersburg. “I was expecting it a bit later.”

Nord Stream 2, set to bring Russian gas directly to Germany across the Baltic Sea, has been a major source of friction in trans-Atlantic relations for years, with the White House claiming the link could give the Kremlin new leverage over U.S. allies in Europe. The Biden administration softened its stance last month, when it waived sanctions against both the operator Nord Stream 2 AG and its chief executive officer.

Almost Completed

Biden said new sanctions would hurt relations with Europe and the 1,230-kilometer (760-mile) link was almost completed anyway. German Chancellor Angela Merkel sent a high-ranking negotiation team to Washington this week to discuss the project with the new administration.

Before carrying the first gas flows to Europe, the link needs to obtain insurance and certification, a task made difficult by U.S. sanctions that restrict providing these services to the project.

Uniper SE CEO Klaus-Dieter Maubach said earlier in the day in St Petersburg that he sees “no major roadblocks so far” to completion of the pipeline. Uniper, along with Engie SA, Royal Dutch Shell Plc, Wintershall AG and OMV are financing half of the 9.5 billion-euro ($11.5 billion) cost of the project, which is owned by Gazprom.

Under the general permission Germany issued to the project in 2018, Nord Stream 2 is allowed to carry out construction work in the nation’s exclusive economic zone until the end of September.

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