‘The embargoes will fall away’

The first takeover plan

Reports of US activities in connection with Nord Stream 2 first surfaced in November last year. The Washington Post reported that, back on 28 February 2024, US businessman Stephen Lynch had applied to the responsible US authority, the Office of Foreign Assets Control (OFAC), for permission to take over the pipeline operating company, which is registered in Switzerland and subject to sanctions. This deal would be in the interests of the United States, he argued, since the gas pipeline would then become US property and de facto come under American political control. Lynch is thought to be quite well connected in Moscow. Back in 2007 he was involved in the efforts to bring foreign companies owned by Mikhail Khodorkovsky’s now disbanded Yukos Group into the ownership of Rosneft.[1] He also succeeded in taking over the sanctioned Swiss branch of the Russian Sberbank in 2022. Lynch has said that, employing his experience in “de-russification” of sanctioned companies, he wants to take over Nord Stream 2. While his plan was considered hopeless under US President Joe Biden and the Democrats’ policy of stoking the Ukraine war, things could now change fast in light of Donald Trump’s announcement that he wants the war to end.

Under US control

The Financial Times picked up on the story at the beginning of March. In the meantime, the Swiss insolvency proceedings against the Nord Stream 2 operating company, which were originally due to start on 9 January 2025, have been postponed until 9 May this year at the request of its owner, Gazprom. The Russian energy giant has stated that the change of administration in the United States and the February federal election in Germany “can presumably have significant consequences on the circumstances of Nord Stream 2.”[2] There is also at least one other interested party looking at Nord Stream 2. A US-led consortium is considerably further advanced in takeover preparations than Lynch. It is said to be engaged in concrete talks on a deal. As reported by the Financial Times, several prominent members of the Trump administration have been informed about the developments and regard such a deal as potentially part of Washington’s efforts to re-establish political relations with Moscow at some level. Indeed, an agreement on Nord Stream 2 could be an element of a comprehensive agreement to end the war in Ukraine. The Financial Times also pointed out that a takeover of the gas pipeline by a US-led consortium would give the United States additional influence over Europe’s natural gas supply.

Only with Berlin’s consent

Of course, Nord Stream 2 could only be re-commissioned with the express consent of the German government. No such consent has so far been forthcoming. Referring to the Financial Times report, a government spokesperson pointed out that Nord Stream 2 was “not certified” due to the escalated dispute over the pipeline in 2021, so it could “not be used at all”.[3] Media reports on the matter were described as “highly speculative”. The EU Commission has also rejected any idea of re-commissioning the Nord Stream 2 line that was not blown up. A Commission spokesperson in Brussels said that the pipeline would not benefit the EU’s energy supply arrangements as it would “not diversify” supplies and would “re-establish dependency on an unreliable partner,” namely Russia.[4] It is still unclear as to whether any Germans are now involved in the conversation. However, the Washington Post has referred to Berlin Global Advisors, a consultancy that includes Rüdiger von Fritsch, a former German ambassador to Moscow.[5] The agency has not confirmed any involvement. The former managing director of Nord Stream 2, Mathias Warnig, explicitly denied the Financial Times’ claim that he took part in talks on the re-commissioning of the gas pipeline.[6]

‘Much cheaper than LNG’

Meanwhile, CDU member of parliament Thomas Bareiß is the first politician from the future German government coalition to publicly speak out in favour of Nord Stream 2 coming back into operation. “When there is peace again and the weapons are laid down between Russia and Ukraine (and hopefully that will happen soon),” Bareiß wrote on the social network LinkedIn, then “relations will normalise, the embargoes will fall away sooner or later and, of course, gas can start flowing again.” This would happen “perhaps this time in a pipeline under US control,” explained the CDU MP, alluding to the plans of a US-led consortium and Stephen Lynch. Bareiß added that “as Europe will in future continue to be dependent on gas imports” and pipeline gas is “much cheaper than LNG gas and also more environmentally/climate-friendly,” the gas imported via Nord Stream 2 would “certainly find quick buyers in Europe.” Bareiß was Parliamentary State Secretary in the Federal Ministry of Economics from 2018 to 2021 and is currently one of the CDU coalition negotiators with the SPD in the working group dealing with policy on transport and infrastructure.[7]

More Russian LNG

The push for getting Nord Stream 2 flowing again is taking place in a situation of political tension. On the one hand, strong political forces in the EU are urging the complete phase-out of all Russian natural gas while, on the other, deliveries of Russian liquefied natural gas to the EU are actually on the rise. No Russian LNG may be imported via the German LNG terminals, but deliveries are still possible at other LNG terminals in Western Europe. In 2024, the EU economies bought 9 per cent more Russian liquefied gas via these terminals than in the previous year. They spent a total of 7 billion euros on Russian imports.[8] As for the US, the American share of the Union’s LNG imports is at a very high level. In 2023, it had already reached almost 50 per cent.[9] In the EU, the Energy Commissioner, Dan Jørgensen, is among those voices insisting that the Union phases out the purchase of Russian natural gas completely by 2027. But this won’t be easy. Cutting off all supplies would affect the gas that is transported to Turkey via the Turk Stream pipeline and from there via the Balkan Stream pipeline to Hungary and Slovakia, in particular. Both countries are therefore opposed to a complete import ban. If it proves impossible to force through a total cut-off policy, Russian gas via the still intact Nord Stream 2 line would not be ruled out. A deal would then only depend on the pipeline being certified by the German authorities.

[1] Catherine Belton: American businessman makes play for Russian natural gas pipelines. washingtonpost.com 22.11.2024.

[2] Max Seddon, Henry Foy, Felicia Schwartz: Putin ally pushes deal to restart Nord Stream 2 with US backing. ft.com 02.03.2025.

[3] Bund weist angebliche Pläne zu Nord Stream 2 zurück. n-tv.de 03.03.2025.

[4] Jasper Steinlein: EU commission not considering involvement in Nord Stream 2. euractiv.com 04.03.2025.

[5] Catherine Belton: American businessman makes play for Russian natural gas pipelines. washingtonpost.com 22.11.2024.

[6] Ingo Malcher, Stefan Willeke: Matthias Warnig bestreitet, Nord Stream 2 wiederaufbauen zu wollen. zeit.de 02.03.2025.

[7] Christian Geinitz, Andreas Mihm, Katharina Wagner: Will Europa zurück zu Putins Gas? faz.net 15.03.2025.

[8] EU imports of Russian fossil fuels in third year of invasion surpass financial aid sent to Ukraine. energyandcleanair.org 24.02.2025.

[9] Where does the EU’s gas come from? consilium.europa.eu.