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Trump to sign bill against Nord Stream 2, cut €9.9 billion from Europe

Christian Fernsby ▼ | May 21, 2019
US Energy Secretary Rick Perry announced that Washington will go after companies involved in the Russian-European pipeline project Nord Stream 2 with restrictions in the "not too distant future".
Nord Stream 2 pipes
America   Nord Stream 2 pipes
"The United States Senate is going to pass a bill, the House is going to approve it, and it's going to go to the President and he's going to sign it, that is going to put sanctions on Nord Stream 2", he said during a visit to Ukraine, one of the most persistent critics of the joint venture, which is set to build a route for gas deliveries beneath the Baltic Sea.

The second part of a recent report from Arthur D. Little (ADL) “Nord Stream 2 economic impact in the construction phase” analyses the economic effects (job creation and GDP) of the ongoing project to build two new gas pipelines from Russia to Germany.

The report, which is a follow-up to an earlier report created in 2017, analyses the current status of project investment and concludes that the total economic benefit to the European Union (EU) represents €9.9 billion for building the pipelines.

In comparison to the first report (2017), which was carried out in the procurement phase, more than twice as much CAPEX has now been committed and spent in several EU and non-EU countries now that the project is in the middle of construction.

More than 1000 contractors from all over Europe and Russia are contributing to the realisation of the project.

This includes both large international firms providing materials or construction services and small enterprises providing expert services.

Furthermore, the investment until the end of December 2018 creates 57 500 full-time job equivalents in the EU over five years, adding €4.7 billion in GDP in various industrial sectors.

Nord Stream 2 is a major natural gas infrastructure project that aims to build a pipeline system with 55 billion m3/y of transport capacity.

It will safely and reliably export gas to the European market, where demand is stable but indigenous production is decreasing, creating an import gap.

The objective of the new Arthur D. Little study, commissioned by Nord Stream 2, is to understand the direct, indirect and induced effects of the project on the European economy, and on countries where actual investments in the pipeline have been or are being made in more detail.

Compared to the previous report, the current one takes actual spent and detailed supplier data until the beginning of operations into account.

It estimates the effects related to the execution of the project, as well as those on supply chains and the wider economy.

The analysis used an economic modeling tool (IMPLAN) based on underlying statistical databases for different economies.

The study considers all committed and spent investments as of the end of December 2018 of (CAPEX) €8 billion.


 

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