The scandal is huge. The US fought fiercely to block the Nord Stream 2 gas pipeline so that Russian gas would not flow through it to Germany, and now a friend of Putin can resume the project with money from the US and from a Trump sponsor.
The fate of the Nord Stream 2 gas pipeline is one of the clearest illustrations of the failure of the European policy of "Wandel durch Handel" (change through trade). It was based on the idea that economic cooperation with the former USSR, and after its collapse with Russia and other undemocratic regimes, could change them and gradually democratize them. However, Russia's invasion of Ukraine put an end to this illusion.
However, recently there have been reports that it is possible that “Nord Stream-2“ could be revived. According to one version, German businessman Matthias Warnig, whom the media describe as a friend of Vladimir Putin, intends to restart it with funds from American investors. Another version states that the German authorities are considering the possibility of using part of the pipeline to import hydrogen from Finland. How realistic are these scenarios and what is Germany's attitude towards them?
What is known about the possible restart of “Nord Stream-2“
Citing their own sources, “Financial Times“ and the newspaper “Bild“ reported that “Nord Stream-2“, which Germany froze after Russia's invasion of Ukraine, could be restarted with the participation of American investors. According to their information, German businessman Matthias Warnig, former head of the Swiss company Nord Stream-2, which was supposed to be the operator of the project, will be directly involved in the restoration of the pipeline.
A Russian ship laying pipes on the bottom of the Baltic SeaPhoto: Jens Büttner/dpa-Zentralbild/picture alliance
“Bild“ claims that secret negotiations have been underway in Switzerland for several weeks to restart “Nord Stream-2“. According to the publication, President Trump's envoy for special missions, Richard Grenell, is participating in them. He denies this. It is not yet possible to clarify who represents Russia at the negotiations. According to “Bild“ Germany is not represented at the negotiations.
The discussed plan envisaged that the gas pipeline would be controlled by American companies. According to the sources of the “Financial Times“, the US sees the resumption of the project as a way to improve relations with Russia and at the same time a tool to put pressure on Moscow in future negotiations on the fate of Ukraine. In addition, for American investors, this is a chance to “have money fall from the sky“, the sources indicate. According to an informant of “Bild“, connected to the German government, this is a “realistic scenario“. At the time, the German authorities are looking for ways to prevent such a development of events.
Although the EU has taken a number of strict sanctions against Russia, a real embargo on Russian gas has never been adopted - there is only a general declaration of intentions that imports from there should be stopped in 2027. German gas market expert Heiko Lohmann draws attention to this fact and says: "Theoretically, it is possible for Nord Stream 2 to work. However, the possibility of Germany certifying the pipeline seems completely absurd to me. But the situation is now such that we can imagine almost anything - including how the Americans and Russians conclude a deal and the US starts buying Russian gas."
Who is Warnig and why is he considered a friend of Putin?
69-year-old Matthias Warnig is a German from Brandenburg who, according to media reports, has known Vladimir Putin since the late 1980s. At that time, Warnig served in the Stasi in the GDR Ministry of State Security, and Putin - in the Soviet Foreign Intelligence Service in Dresden. There are several versions of the acquaintance. According to the "Wall Street Journal" Warnig was recruited by Putin.
In the early 1990s, Warnig attended the opening of a branch of Dresdner Bank in St. Petersburg, where Putin was then working in the city administration. The acquaintance was renewed. Later, from 2003 to 2015, Warnig was a member of the supervisory board of the bank "Russia", which is close to the Russian president. Since 2006, he has worked in the companies managing "Nord Stream-1" and "Nord Stream-2".
Warnig will leave his post as CEO of "Nord Stream-2" in 2023, about a year after the start of the war in Ukraine. To "Die Zeit" he claims to have met with Putin in Moscow and tried to persuade him to stop the invasion. Warnig told the Financial Times that he "had not been involved in any negotiations with American politicians or businessmen."
Which American investors could participate?
At the end of 2024, the “Wall Street Journal“ reported that Steven Lynch, founder of the American investment company Monte Valle and one of Donald Trump's sponsors, claimed assets of “Nord Stream-2“. He asked the US Treasury Department to allow him to participate in an auction for the acquisition of these assets. According to the German “Bild“ Lynch continues to participate in negotiations to purchase the gas pipeline.
Lynch is well-known in Russia. In 2007, he acquired the foreign assets of “Yukos“, and later it turned out that this was done in the interests of Steven Jennings and Richard Dietz, founders of the investment company “Renaissance Capital“. Matthias Warnig was also involved in the deal, Reuters has learned. Warnig secured the buyers the support of Rosneft, where Yukos' Russian assets went, and received shares in Renaissance Capital as a reward, Reuters writes.
This means that the two key players in the story of the possible restart of Nord Stream 2 - Matthias Warnig and Stephen Lynch - are, if not related, then at least familiar.
What do Germany and the EU think about the restart of Nord Stream 2?
The EU is not interested in the resumption of work on Nord Stream 2, as this will not help diversify gas supplies to Europe, but on the contrary, will once again make Europe dependent on an "unreliable partner" like Russia, said European Commission (EC) spokeswoman Anna-Kaisa Itkonen recently.
However, possible options for the operation of “Nord Stream-2“ are still being discussed in Europe. As “Handelsblatt“ learned back in February, one of the options is to use part of the gas pipeline to import hydrogen from Finland to Germany. But the possibility of resuming gas supplies from Russia is also being considered - after the end of the war in Ukraine. A German government source told the publication that “there are no discussions”, but at the same time noted that the authorities would not want to leave the future of the pipeline uncertain.
“I have always been against “Nord Stream-2” and I have warned that this will be a grave for billions of investments, because we do not need this (additional) Russian gas," Jürgen Hard, a foreign policy expert from the CDU/CSU faction in the Bundestag, told DW.
"Of course, there is a need for pipelines in the Baltic Sea. Whether they can be used (for hydrogen supplies, ed.) is something that experts must assess. But I am categorically against allowing Russia or anyone acting in its interest to control these pipelines again," Hard also points out.
When will Europe give up Russian gas?
In 2022, the EU set itself the goal of completely giving up Russian energy resources by 2027. However, this goal may not be achieved. The European Commission was due to present a detailed roadmap at the end of March, but its publication has been postponed and no new date has been set.
Before the war, Russia's share of gas supplies to Europe was almost 45%. Last year, when transit was still taking place via Ukraine, Russia's share was already around 20% - slightly more than in 2023 (15%). After the transit is stopped, Russia's share of gas supplies will decrease, but will remain significant. Russia is still the second largest supplier of liquefied natural gas to the EU after the US: In 2024, Russian liquefied natural gas will account for around 6.6% of total EU gas consumption, according to a report by the German environmental organisation Deutsche Umwelthilfe.
The uncertainty is now so high that it would be reckless to make any predictions. "So far, the EU has acted cautiously, but we don't know what will happen next," says expert Heiko Lohmann in this regard. "Hungary, for example, has said that it would not give up Russian gas for anything in the world. Slovakia - too. There are several other countries in the EU that are categorically against stopping Russian supplies. But depending on how the situation in Ukraine develops, all this may acquire a new dynamic," Lohmann points out.