Nord Stream 2: Bankruptcy averted

Zug. The heavily indebted Russian pipeline operator Nord Stream 2 AG can continue searching for a new investor for the time being: The court in the Swiss canton of Zug has approved the restructuring agreement, which makes restructuring possible through a debt haircut. Otherwise, bankruptcy would have been declared under Swiss law – equivalent to German insolvency proceedings. Nord Stream 2 is owned by the Russian state-owned company Gazprom and is headquartered in the canton of Zug.

Major creditors, including the Western European energy companies Engie, OMV, Shell, Uniper, and Wintershall, agreed on a restructuring agreement on April 30, the court announced. Because appeals against the agreement are still possible, it declined to provide further information.

The major creditors, who had invested billions, likely accepted significant discounts on their investments. The restructuring agreement was negotiated for two and a half years. The construction of the pipeline cost nearly 10 billion euros.

The claims of small creditors – including numerous construction companies in Mecklenburg-Western Pomerania – were to be fully compensated according to the court's January order. At least some have recently confirmed that their invoices have been paid.

Nord Stream 2 was intended to transport natural gas from Russia to Germany through two 1,200-kilometer-long pipelines in the Baltic Sea. The pipeline was completed but never entered operation. Shortly after the Russian invasion of Ukraine in February 2022, the German government halted the project. One of the pipelines was destroyed in an attack in September 2022, as were the pipelines of the already operational Nord Stream 1 pipeline.

There has recently been media speculation about the involvement of US investors. One such person mentioned is Stephen P. Lynch, a wealthy US businessman and supporter of US President Donald Trump. He told the Wall Street Journal that the purchase represents a unique opportunity to bring Europe's energy supply under American and European control. The idea is to pump Russian gas to Europe through an American pipeline. Lynch has been active in Eastern Europe and Russia for 20 years.

The pipeline operation could become part of a US-Russian agreement to resolve the war in Ukraine. Russian Foreign Minister Sergei Lavrov said on state television in March: "Nord Stream is being discussed."

Unused pipes for the Nord Stream 2 Baltic Sea gas pipeline from Russia to Germany are stored on the grounds of the port in the municipality of Sassnitz.

Source: Stefan Sauer/dpa

Gas market analyst Heiko Lohmann commented: "I wouldn't rule out the possibility that US investors will buy the pipeline to transport Russian gas, and that US President Donald Trump will then exert pressure on the Europeans to use it as well," he said. "There are currently no sanctions against Russian gas." However, the EU has just presented plans to completely stop imports of Russian gas by 2027.

Lohmann is skeptical about the pipeline's continued use. "From a gas industry perspective, I don't see a future for Nord Stream 2 as a natural gas pipeline," Lohmann said. "If there is even a fair peace between Russia and Ukraine, mediated by the EU, then Russian gas supplies could be part of the future. But that would involve using the pipelines through Ukraine and Poland. The required quantities would then be such that Nord Stream 2 would not be needed at all."

It has been investigated whether the pipeline could also transport hydrogen, for example from Finland to Germany. "How realistic that is is difficult to say," Lohmann said.

RND/dpa