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10 Feb, 2021 12:41

Germany denies offering US ‘dirty deal’ to drop sanctions against Nord Stream 2

Germany denies offering US ‘dirty deal’ to drop sanctions against Nord Stream 2

The German government has denied claims by an environmentalist group that it offered Washington ‎€1 billion ($1.21 billion) to boost imports of American liquefied natural gas (LNG) in exchange for dropping Nord Stream 2 sanctions.

On Tuesday, a group called Environmental Action Germany published a letter from Finance Minister Olaf Scholz to former US Treasury Secretary Steve Mnuchin, offering the alleged deal.

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In the letter, Scholz refers to the talks between the two officials, which appear to have centered around the Nord Stream 2 pipeline and imports of American LNG. In the attached “non-paper” section, the minister said that the German government “is very concerned” about US sanctions against the project, which endanger completion and subsequently put European energy security at risk.

While stressing that Berlin rejects both “direct pressure” from Washington and its punitive measures, the German government still came up with “a way forward.” In addition to increasing European purchases of American LNG, the German government was ready to massively boost investment in construction of LNG terminals on its territory.

“The German government is willing to massively increase its public support for the construction of LNG terminals along the German coastline in order to secure the construction of LNG terminals in Brunsbuettel and Wilhelmshaven and by providing up to €1bn,” the letter read.

Shortly after the document emerged, Svenja Schulze, Germany’s Minister for Environment, Nature Conservation and Nuclear Safety, said that no such deal ever existed.

“There is no dirty deal. It doesn’t exist. I strongly deny this,” the minister said on Wednesday as cited by Russian media.

The US has been long accused of trying to take advantage of the lucrative European energy market. The previous US administration condemned the EU’s “increasing dependency” on Russian gas, while offering its own more expensive LNG, officially branded as “molecules of freedom” or simply “freedom gas.”

Other German proposals included ensuring continued gas transit through Ukraine and supporting a Polish gas pipeline known as the Baltic Pipe, as Warsaw seeks to cut energy imports from Russia.

In return, the US would allow the completion and operation of Nord Stream 2. “Future legislation, which could be the basis for sanctioning Nord Stream 2, will either not be used or, in the case of compulsory sanctions provisions, blocked by waivers or other adequate and effective tools,” according to the letter. 

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While the environmental group that made the letter public does not support the construction of the Russian pipeline, it called the proposal to the US a “dirty deal” at the expense of taxpayers. The group demanded clarification from the government on the matter.

Nord Stream 2 is nearing completion despite multiple rounds of US sanctions that forced several European contractors to leave the $11 billion project. The gas link between Russia and Germany is set to double the existing pipeline’s capacity by 55 billion cubic meters of gas per year.

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