Following Vladimir Putin’s decision to deploy troops into parts of Ukraine, German Chancellor Olaf Scholz announced the country will be putting the operating licence for Nord Stream 2 on ice.
But what is Nord Stream 2, and what role does it play in tensions between Russia and the rest of Europe?
What is Nord Stream 2?
Nord Stream 2 is a recently-completed undersea pipeline which was set to deliver a regular supply of natural gas from Russia to Germany.
The pipeline has an annual capacity of 55 billion cubic meters, enough to meet more than half of Germany’s annual consumption.
Where does it go?
Nord Stream 2 travels from Ust-Luga near St Petersburg to Greifswald, Germany.
It does not pass through neighbouring Ukraine or Poland and instead runs along a 750 mile (1,230km) route under the Baltic Sea.
Bypassing Ukraine potentially deprives the former Soviet republic of around $1bn in transit fees which Russia currently pays to send gas through its territory.
From Germany, gas is delivered to a number of European countries through secondary pipelines, including France, the Netherlands and the UK.
When was it established?
Following the completion of sister gas pipeline Nord Stream in 2011, a feasibility study into building a second pipeline alongside was completed in 2012.
Financing agreements between Gazprom and European energy companies to fund the project were signed in April 2017. Construction began on the pipeline in 2018 before being completed in September 2021.
Nord Stream 2 was set to be run by energy company Gazprom, of which the Russian state is the largest shareholder.
Gazprom put up half of the cost of its construction with western energy firms such as Shell and ENGIE of France contributing the rest.
The two sister pipelines could deliver 110bn cubic metres of gas to Europe annually, equivalent to more than a quarter of the entire EU’s annual consumption.
Why does it matter?
The EU is the largest gas market for Russia, and Putin is believed to have personally pushed for the project to go ahead.
Gazprom, the company behind the Nord Stream pipelines, generated revenues of £93 billion in 2019 – amounting to roughly 8% of Russia’s GDP.
What’s the controversy?
The US, UK and several other European countries has viewed the pipeline as a geopolitical tool which increases Moscow’s leverage over Europe, particularly Germany.
Ukrainian president Volodymyr Zelensky has called Nord Stream 2 "a dangerous political weapon".
UK PM Boris Johnson said Europe needs to "snip the drip feed into our bloodstream from Nord Stream".
In the US, both Republicans and Democrats have fiercely opposed the project, imposing sanctions against companies involved in its construction.
During his term, President Donald Trump unsuccessfully tried to end the project, claiming Nord Stream 2 would make Germany “a captive to Russia.”
The Biden administration waived those sanctions in May last year in an effort to rebuild relations with European allies, and arguing that the project was nearly finished anyway.
What are the consequences of pulling the plug?
Most European nations do not have a substantial domestic supply of natural gas.
Pulling the plug on Nord Stream 2 will make it harder for European countries to source an adequate supply of gas, which is likely to push up prices.
Therefore, pulling the plug is expected to have an economic impact on both the Russian and EU economies.
