The Russians have sent their only pipe-laying vessel equipped with dynamic positioning system – Akademik Cherskiy – to Europe. But can the tiny ship without previous experience in pipe-laying do the job, Mateusz Kubiak ponders.
Mateusz Kubiak is an oil&gas senior analyst with Warsaw-based consultancy firm Esperis. He is also an expert on South Caucasus region, publishing in news magazines and cooperating with other NGO’s and think-tanks.
It appears that the Russians have finally decided on the method of completing Nord Stream 2 construction works. The Russian pipe-laying vessel, Akademik Cherskiy, is moving towards Europe and if nothing unexpected happens (the AIS location of the ship has been disabled), it may ultimately reach the Baltic Sea as soon as April.
The crucial question is whether the “Cherskiy” is ready enough to perform pipe-laying operations without further modernization. And another one is if the US will decide to hit Nord Stream 2 once more with a new set of sanctions.
The Russians have to rely on themselves
Construction works on Nord Stream 2 – the gas pipeline from Russia to Germany with annual capacity of 55 billion cubic meters – were suspended in December 2019 due to signing of National Defense Authorization Act (NDAA) by President Donald Trump.
NDAA includes set of mandatory sanctions against foreign entities selling, leasing, or providing pipe-laying vessels at depths greater than 100 feet, which can be imposed by the U.S. without consulting allies.
Such wording of the NDAA provisions left no space to Allseas – the Nord Stream 2 contractor – and forced the company to halt pipe-laying operations in order to avoid the sanctions. Likewise, that risk has also effectively prevented other global engineering companies from taking over the works from Allseas.
During the last weeks and months, the confusion around Nord Stream 2 has been constantly growing. How and when the Russians could restart the construction works, were the questions that have often emerged in recent weeks.
Nonetheless, the situation seems to be clearer now, as the Russians have sent their only pipe-laying vessel equipped with dynamic positioning system – Akademik Cherskiy – to Europe, possibly delaying some of the Russian gas projects in the Far East (Gazprom had already concluded the tender for further adapting the ship to work on the Sakhalin gas fields and such modernisation was scheduled to be performed in 2020-2021).
What do we know about “Cherskiy”?
“Cherskiy” left the Far East port of Nakhodka at the beginning of February. Despite the fact, that AIS location of the ship has been disabled when it passed Sri Lanka and headed for the Suez Canal, it might be that the vessel will ultimately reach Baltic Sea already in April. And then it should call at one of the Russian ports – Kaliningrad or Sankt-Petersburg.
However, it is uncertain at this stage to what extent the vessel has been already prepared to work on Nord Stream 2 completion.
Akademik Cherskiy has never been used in any kind of pipe-laying operations and there were a lot of potential issues to address regarding its design and equipment first. Of course, the ship has been undergoing continuous modernization through the last years, but we know nothing about its detailed results.
Therefore, that is still an open question – how long “Cherskiy” will have to stay in one of the Russian shipyards on the Baltic Sea once it has arrived. It may be a months-long mooring in the dock to undergo further modernisation, but it is also possible that it will just take a short stay to be provided with additional equipment, inventories and crew.
The schedule is tight and the US might step in
Sooner or later, if Akademik Cherskiy is to work alone on project completion in Danish waters (Allseas used two pipe-layers simultaneously, one per each Nord Stream 2 string to be laid), it will need even few months only to complete the work.
At the same time, remaining works in the German section could be performed by other vessels, as this part of the pipeline does not fall under the sanctions.
Anyway, whether the revised Nord Stream 2 schedule could be met will depend on the current state of preparedness of the “Cherskiy” for the pipe-laying work.
The Russians declare that the pipeline shall be operational by the end of 2020 or during the first quarter of 2021. But it would require “Cherskiy” to start pipe-laying not later than during the summer. And this cannot be taken for granted as of now.
Moreover, if there is something that may stop Russians from completing Nord Stream 2 based on their own resources, it is a new set of US sanctions.
Just as the Congress has targeted the pipe-laying vessels working on Nord Stream 2, now it might be considering broadening the sanctions too.
It seems improbable that the US would hit the European majors supporting the project financially. But still, the Congress may consider applying other sectoral sanctions, hitting at some critical spheres of pipe-laying/commissioning work.
If the US decides to step in again, it will be another flashpoint, not only in the transatlantic relations but also within the EU itself.
There is no doubt that the possible American move would be praised by the bunch of CEE and Nordic countries, while the Europeans promoters of Nord Stream 2 will criticise unilateral sanctions.