A Debate Rekindled by Rumors and Geopolitical Shifts
The prospect of reviving the Nord Stream pipelines has once again become a topic of discussion, fueled by rumors of a potential transfer of a controlling stake in Nord Stream 2 AG to American investors. While speculative, this development signals a broader conversation that is likely to gain momentum once Europe’s most significant conflict in 80 years comes to an end.
Prior to their suspension in September 2022, the combined capacity of Nord Stream 1 and 2 was 300 million cubic meters (mcm) of gas per day. To put this in perspective, Ukraine’s gas transmission system (GTS) at the EU border offers 390 mcm/day, the Yamal-Europe pipeline provides 90 mcm/day, and the European segment of TurkStream delivers 43 mcm/day. According to the European Network of Transmission System Operators for Gas (ENTSOG), the EU’s total gas imports—including liquefied natural gas (LNG)—stood at 960 mcm/day in 2021, dropping to 790 mcm/day in 2024. This means that the infrastructure available to Gazprom for potential EU deliveries remains comparable to the bloc’s current gas import volumes.
A Stagnant Market with Limited Growth
Despite potential shifts in supply routes, Europe’s gas demand is not expected to see a substantial increase. The growth of renewable energy sources and the widespread adoption of heat pumps in industry are major limiting factors. Any potential rise in demand hinges on two key developments: the relaxation of energy austerity measures introduced in 2022 and the replacement of coal with natural gas in power generation. Notably, Friedrich Merz, a leading candidate for Germany’s chancellorship, has recently emphasized the need for this transition, advocating for the construction of 50 new gas-fired power plants.
However, with additional LNG export capacity coming online in North America, Gazprom’s best-case scenario is a return to its 2021 EU supply levels of 390 mcm/day—up from just 86 mcm/day in 2024. Given that existing infrastructure, including Ukraine’s GTS, Yamal-Europe, and TurkStream’s European thread, could accommodate this recovery, the question arises: why focus on Nord Stream?
The Case for Restarting Nord Stream
Restarting Nord Stream—particularly Nord Stream 2, which never reached commercial operation—could unlock the value of vast upstream investments that currently lie dormant. These include:
- Two Bovanenkovo-Ukhta pipelines (Yamal to Komi), costing 990 billion rubles at 2008 prices.
- Two Ukhta-Gryazovets pipelines (Komi to Vologda), valued at 449 billion rubles in 2010-11 terms.
- A pipeline from Gryazovets to the Slavyanskaya compressor station in Leningrad Oblast.
- Four pipeline threads from Slavyanskaya to the Baltic coast.
- The Slavyanskaya compressor station itself, built to handle Nord Stream’s full 300 mcm/day capacity.
These projects represent a massive capital investment, significantly larger than the funds allocated for the Power of Siberia pipeline to China. Without a restart of Nord Stream, this infrastructure remains “dead capital,” yielding no return.
Hurdles Ahead
The revival of Nord Stream 1 and 2 will face substantial opposition in Europe. Environmental groups, citing the ecological impact of the pipelines’ 2022 sabotage, are expected to lead the resistance. Additionally, political opposition may present formidable challenges to any efforts to restore Russian gas flows via the Baltic Sea.
For Gazprom and its investors, the potential benefits are clear: a revived Nord Stream could reanimate stranded assets and offer a viable route for gas exports. For Europe, the fundamental question remains whether energy pragmatism will outweigh geopolitical and environmental concerns. As the continent moves beyond its current crisis, the outcome of this debate will play a crucial role in shaping its energy future.
