Russian President Vladimir Putin has announced that laying the pipes for the first of two lines of the prospective Nord Stream 2 pipeline to Germany has now been "successfully completed."
Addressing an economic forum in St. Petersburg on June 4, Putin also said that "work on the second line is continuing."
While the underwater section still needs to be linked to the section on German territory, Russian energy giant Gazprom "is ready to start filing Nord Stream 2 with gas," he added.
Gazprom shares went up 0.6 percent after Putin's comments, reaching 273.80 rubles ($3.74) -- their highest level since mid-2008.
The United States, which has strongly opposed construction of the new Russian pipeline, last month announced new sanctions against Russian companies and ships involved in the project.
But the administration of President Joe Biden decided to waive sanctions against the company overseeing the project and its CEO.
In Washington, the move was met with criticism from Republicans and some Democrats, while the Kremlin hailed it as a "positive signal" ahead of a June 16 summit between Biden and Putin.
The Baltic Sea pipeline was at the center of a political tussle between Berlin and Washington during the previous administration of former U.S. President Donald Trump. Since coming into office in January, Biden has sought to heal relations with Europe after they were bruised under his predecessor.
U.S. officials have warned the pipeline will make Europe more dependent on Russian energy supplies and bypass Ukraine, which relies on gas transit fees.
The German government has refused to halt the project, arguing that it is a commercial venture and sovereign issue.
Putin told the St. Petersburg International Economic Forum that Russia will continue pumping 40 billion cubic meters of gas via Ukraine a year in line with the existing five-year contract.
Kyiv is locked in a confrontation with Moscow over Russia's 2014 seizure of Ukraine's Black Sea Crimean Peninsula and the Kremlin's support of separatists in eastern Ukraine.
Describing the U.S. use of the dollar as a political weapon, Putin also said that European states should pay for Russian gas in euros, a day after Moscow said it would remove dollar assets from its National Wealth Fund while increasing the share of the euro, Chinese yuan, and gold.
"The euro is completely acceptable for us in terms of gas payments. This can be done, of course, and probably should be done," he said.
Russia has long moved to reduce the dollar's share in its hard-currency reserves as it has faced waves of U.S. sanctions amid heightened tensions with the West over issues including the conflict in Ukraine, cyberattacks allegedly by Russian hackers, and Russia's treatment of jailed opposition activist Aleksei Navalny.
In an interview with state-run Channel One television on the sidelines of the St. Petersburg forum, Putin said he expected "no breakthrough" from his meeting with Biden, but expressed hope that the talks will be held in a "positive atmosphere."
ADVERTISEMENT
"But the very fact of our meeting, that we will speak about possibilities for restoring bilateral relations, about matters of mutual interest, and, by the way, there are a lot of them, is quite good as such," he added.
Late last month, Biden said he would press his Russian counterpart to respect human rights when the two leaders meet.
The U.S. president in March said he believed Putin was a "killer," which prompted a diplomatic row that led to Moscow recalling its ambassador to Washington for consultations.
By RF/ERL
More Top Reads From Oilprice.com:
- Climate Revolt Against Big Oil May Lead To Surge In Crude Prices
- Hedge Funds Grow More Bullish On U.S. Crude Oil
- Biden Nixes $35 Billion In Fossil Fuel Tax Benefits
Addressing an economic forum in St Petersburg on June 4, President Putin announced that laying the pipes for the first of two lines of the pipeline to Germany has now been successfully completed. He also said that work on the second line is continuing and that Russian energy giant Gazprom is ready to start filing Nord Stream 2 with gas.
And despite the escalating tension with Ukraine, Putin told the Forum that Russia will continue pumping 40 billion cubic meters of gas via Ukraine a year in line with the existing five-year contract.
Putin also said that European states should pay for Russian gas in euros, a day after Moscow said it would remove dollar assets from its National Wealth Fund while increasing the share of the euro, yuan, and gold.
The Nord Stream 2 was at the centre of a political tussle between Berlin and Washington during the Trump administration. But the Iron Lady of Europe, German Chancellor Angela Merkel has refused to halt the project, arguing that it is a commercial venture and sovereign issue.
US Efforts to derail Soviet oil and gas pipelines to Europe have failed since the 1960s. Scraps over Soviet pipelines were a feature of the Cold War. In the early 1960s, Kennedy sought to halt the Friendship (Druzhba) oil pipeline leading from the Tatarstan region to Europe by pushing West Germany to cancel steel-pipe contracts with Moscow. Critics of the policy said that the sanctions drove the Soviet Union, which completed the project, to become self-sufficient in wide-diameter pipe production, hurting Western manufacturers.
About two decades later, Reagan failed to block the more than 4,000-kilometer-long Brotherhood (Bratstvo) gas pipeline, which was being built to bring natural gas from Siberia to Western Europe.
The Reagan administration's frenetic efforts to obstruct the building of the Soviet-European natural gas pipeline didn't fare better than the Kennedy administration's efforts to block" the Friendship oil pipeline.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London