Senior Russian and American officials held discussions regarding attracting an American investor to the Nord Stream project, according to a report by Reuters citing five sources with knowledge of the matter.
According to the same sources, participants in the talks included Kirill Dmitriev, representative of the Russian President for investments and economic cooperation with foreign countries as well as head of the Russian Direct Investment Fund (RDIF), and Jared Kushner, son-in-law of the American President.
As emphasized in the report, the American side considers that business will play a decisive role in restoring peace.
The deal under discussion would grant American investors the ability to benefit from Europe's energy supply following the cessation of hostilities.
However, a White House spokesperson stated to Reuters that no talks regarding Nord Stream have taken place recently.
Concurrently, any transaction would have to be agreed upon with Russia, the US International Development Finance Corporation (DFC), and the US Department of the Treasury.
A deal is considered improbable in the medium term due to existing hurdles.
Nord Stream is subject to sanctions by both the US and the European Union.
A spokesperson for the German Ministry for Economic Affairs and Climate Action stated that any resumption of the pipeline's operation requires the approval of the German government, which appears unwilling to consent.
Furthermore, Germany has already identified alternative solutions for its energy supply.
The difficulties tied both to selling the company controlling the Nord Stream pipeline to an American investor and resuming Russian natural gas supplies are related, according to the authors of the report, to the company's existing shareholding structure.
Gazprom holds 51% of the shares, while an additional 31% belongs to two German companies.
The remaining stake is distributed between a French and a Dutch company.
German influence
According to one of the sources, the German shareholders seek to retain their stakes in order to safeguard German influence in the company in the event that Gazprom decides to sell its share.
Bundestag member and energy policy expert for the AfD, Steffen Kotré, assesses that without the reopening of the remaining gas pipeline, Germany will be unable to preserve its industry in its current form.
The AfD demands the restoration of Nord Stream's operation.
The issue is expected to be discussed at the Russia–US–Germany business forum, the organization of which has been announced by Kirill Dmitriev.
The event is scheduled to take place in 2027.
It is unclear to what degree Washington is interested in resuming Russian gas supplies to Germany, Europe's largest energy consumer, reports Reuters.
It is worth noting, however, that the idea of American investor participation in this specific project has been voiced in the past.
According to a report in The Wall Street Journal, Stephen Lynch, who possesses experience negotiating deals in Russia, had asked the American government to allow him to submit a bid to acquire the Nord Stream 2 pipeline in the event it is offered for sale via auction.
The investor assesses that acquiring the pipeline could serve as a means of exerting leverage over Russia in the framework of negotiations on the Ukrainian issue.
According to certain estimates, the damage sustained by Russia exclusively from the destruction of Nord Stream gas transit infrastructure stands at 26.5 billion dollars.
Additionally, another 51.5 billion dollars corresponds to frozen investments concerning the development of gas fields, as well as the construction and modernization of pipelines.
Finally, according to the same estimates, lost revenues over a 50-year horizon, a timeframe during which these specific pipelines could have remained in operation, may reach 1.4 trillion dollars, at 2023 prices.
«There are many problems»
«There are many problems with Nord Stream», points out Igor Yushkov, visiting expert at the National Energy Security Fund and expert at the Financial University under the Government of the Russian Federation.
«I believe it is true that certain American business figures are interested in examining the prospect of purchasing the pipeline or, at least, acquiring a stake in it, in order to put it into operation, use it for gas transit, and so forth.
Evidently, they perceive certain business opportunities, but this holds only provided they acquire the pipeline either free of charge or for a symbolic price».
One of the fundamental problems is whether Gazprom is willing to sell the pipeline or its stake in it for a pittance.
There is also the possibility that Europeans transfer frozen assets of Gazprom, including the operator company of Nord Stream, to an American investor.
Would Gazprom be willing to use them, however, if control over them had already passed to a third party? That is the first issue.
The second, and one of the most critical at present, is that the European Union intends to ban imports of Russian natural gas from 2027.
Therefore, what would be the point of buying a pipeline that may soon become useless?
Besides, this specific pipeline cannot be used to transport any fuel other than natural gas.
Yet another problem concerns Nord Stream 1, which requires repairs.
The pipeline sustained blast damage and its current technical condition remains unclear.
Since 2022, the pipes have been exposed to seawater.
Consequently, a technical assessment is required to determine whether the pipeline can be used again or whether it will need to be rebuilt.
Even if replacing only the damaged section is required, the cost will remain substantial.
One of the Nord Stream 2 lines remains intact
Naturally, as Yushkov points out, «the remaining pipeline may be of particular interest to American investors, but another obstacle exists here as well.
It must be certified, as it has not yet received an operating license.
Negotiations will need to take place with the German side to resume the certification process, as well as with the European Union in order to lift certain restrictions imposed on the pipeline».
There is also an additional issue: European companies have resorted to legal action, arguing that Gazprom failed to fulfill its contractual obligations.
Arbitration tribunals have ruled in favor of these companies.
Therefore, for Gazprom to resume natural gas supplies to Germany, it will require guarantees that it will be paid regularly and will not be forced to pay compensation or settle debts arising from the relevant court rulings.
But what would happen if we sold the natural gas at the pipeline's inlet? What would be the advantages and disadvantages of such an option?
According to Yushkov, «this is a different scenario.
The Americans hint that, beyond purchasing the pipeline, they could also participate in a gas trading and distribution scheme.
In other words, they would purchase the pipeline, source gas from Russia at its entry point, and then resell it themselves on the European market.
Such a deal could resolve the problems associated with gas trading as well as the legal disputes involving Gazprom.
On the other hand, however, the Americans would seek to buy the gas at low prices and resell it in Europe at high prices».
Let us consider, for instance, current conditions where prices have surged to 850 dollars per thousand cubic meters.
In this case, Gazprom could sell the gas at the pipeline entrance for 600 dollars.
What would happen, however, when prices returned to more normal levels, around 300 to 350 dollars per thousand cubic meters at the same point?
Would Gazprom then have to sell it for just 150 dollars?
This represents another serious question. In such an eventuality, Gazprom would reap limited revenues, while increased supply could lead to market saturation and, consequently, a further drop in prices.
Moreover, even if Russia maintained its current gas supplies to the European market, this development could drag down the prices of natural gas exported via South Stream.
As a result, revenues would be reduced both for Gazprom and for the Russian state, which collects revenues from export duties.
The export duty corresponds to 30% of the sale price.
Therefore, state revenues would decline.
In other words, the Americans would be profiting at the expense of the Russians.
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