Could Germany really return to Russian gas via Nord Stream pipelines?

As the war in Ukraine grinds into its fourth year, the notion of Russia pumping gas to Europe via Germany again is not as outlandish as it might have been a few months ago.

Amid media reports that Russian President Vladimir Putin has offered to stop his invasion at the current front line in discussions with the US, speculation continues over the possible re-integration of Russia into Europe's energy mix.

Last month, some politicians from Germany's centre-right Christian Democratic Union (CDU) welcomed the idea of repairing both pipelines of the damaged Nord Stream 1 and the single damaged pipeline on Nord Stream 2. The three were damaged after an act of sabotage in September 2022, with one undamaged.

Nord Stream 1 brought gas to Germany before the Ukraine war began while Nord Stream 2 was finished in September 2021 but never actually entered service.

US and Russia reportedly keen on Nord Stream deal

Both Russia and the United States are reportedly keen on a deal to get gas flowing through the pipelines again.

Russian Foreign Minister Sergei Lavrov said recently discussions with the US have included Nord Stream. Meanwhile, several reports say US investors are interested in buying Nord Stream 2 AG — the Swiss-based subsidiary of Russian state-owned energy giant Gazprom which owns the Nord Stream 2 pipeline.

In January, bankruptcy proceedings against Nord Stream 2 AG were delayed until May, with a redacted court document showing that Gazprom argued that the Trump administration could "have significant consequences on the circumstances of Nord Stream 2."

Finished in September 2021, the two pipes of Nord Stream 2 never went into serviceImage: Axel Schmidt/Nord Stream 2

Chris Weafer, an investment adviser who has worked in Russia for more than 25 years, told DW that there are serious discussions taking place regarding a US purchase of the company.

"There are proposals on the table from US buyers that want to buy the infrastructure, where they could act as a cut out between the source of gas, which is Gazprom, and the buyers of gas, which would be German utilities," he said.

However, Ben Hilgenstock from the Kyiv School of Economics says it is not the US or Russia's place to decide what energy Europe buys.

"Whatever Russia and the United States negotiate with regards to Nord Stream 2 or 1 is entirely meaningless," he told DW. "It is Europe's decision in specific countries, to be fair, whether they want to purchase Russian pipeline gas through Nord Stream 1 and 2 again."

German business suffers under energy costs

So would Europe want to buy Russian pipeline gas again?

Europe's diversification away from Russian gas and oil after the invasion was the main factor which led to a surge in energy costs throughout 2022 and 2023. Although costs have come down significantly from those highs, the re-emergence of Russian energy into the mix would likely push costs down further.

German companies such as the chemicals giant BASF bore the brunt of soaring energy costs in recent years. A spokesperson for the company told DW it would not speculate on any possible deals regarding Russian energy but it did emphasize it was not the only factor affecting its business.

"The increased gas price is only one factor affecting BASF's competitiveness," the spokesperson said. "Other important reasons are the current weak demand and increasing import volumes."

Germany's energy-intensive companies like BASF are suffering from high energy costsImage: KUNZ/Augenklick/BASF SE

Wolfgang Große Entrup, managing director of Germany's Chemical Industry Association (VCI), told DW that his members "welcome measures that reduce excessively high energy prices" but he emphasized the importance of "reliable partners."

"Supplies via Nord Stream 1 were unilaterally suspended by Russia in August 2022," he said. "With a major effort, it has been possible to ensure security of supply even without Russian oil and gas. We should not fall back into old, supposedly comfortable, habits and avoid excessive dependence on individual countries in the future."

However, Hilgenstock cautions that the lure of cheaper energy will always be capable of directing the discussion in some quarters.

"There is this vision out there of cheap Russian gas that can propel us back wherever," he said. "That's where the political pressure is coming from."

A complicated route

Yet political opposition to a restoration of supply remains very strong in Europe. The EU Commission recently reiterated its position on Nord Stream 2.

"Nord Stream 2 is not a project of common interest, it does not diversify EU's energy sources," an EU Commission spokesperson said at a press briefing on March 3.

Project of Common Interest (PCI) status is given to energy infrastructure projects, allowing them to benefit from an accelerated approval process and more flexible regulation.

The EU has pledged to quit all Russian fossil fuels by 2027 and the European Commission plans to release a detailed strategy and roadmap on May 6 as to how it plans to achieve this.

In this context, Hilgenstock thinks supporting the restoration of Nord Stream would be "absolutely bizarre and grotesque."

"I think we would demonstrate that we're fundamentally not serious about Russian sanctions. Turning around on this, specifically, means we are absolutely not serious about restraining Vladimir Putin's ability to continue his war in Ukraine and threaten peace and prosperity in Europe. It would be an absurd development," he said.

Even if some in the German and European political establishment were in favor of restoring one or both Nord Stream pipelines, argued Hilgenstock, there are "multiple technical obstacles."

The EU says it wants to be free of Russian fossil fuels by 2027Image: picture alliance / Inderlied/Kirchner-Media

The Nord Stream 2 pipeline has never been legally certified by Germany, for one, and Hilgenstock said he doesn't see the new German government doing that.

Then there's the significant repair work, which Chris Weaver believes could start relatively quickly if the US was able to convince the EU of the merits of a deal.

"Those discussions are definitely taking place, and they are credible," he said, adding that he expects some Russian gas going back to Europe, "but probably no more than 50 % of the volume that was sold before the invasion" in February 2022.

However, Hilgenstock believes it is vital the EU makes it clear to the US that the re-opening of the Nord Stream pipelines is not up for discussion.

"We just have to say, this is not happening. And whatever bullying you're attempting, we are not undermining a fundamental element of our policy to constrain Russia," he said.

Edited by: Uwe Hessler