Poland has become the first European nation to introduce sanctions against contractors providing services to the controversial Nord Stream 2 Russian gas pipeline across the Baltic Sea to Germany.

The project — where the US is also eyeing its own new sanctions — is highly contentions as it is seen as potentially increasing Western Europe's dependence on Russian gas, while providing a strategic source of revenue for Russia and the Kremlin.


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Poland’s Deputy Infrastructure Minister Grzegorz Witkowski said at the end of the last week that authorities have started to withdraw the registration of two support vessels — the Krebs Geo and the Krebs Jet — that sail under the Polish flag.

Witkowski said that, while the two ships are technically owned by a German company, the Polish port of Gdansk is their registered home port.

“No ship flying our flag can infringe economic interests of the Polish state. These two vessels have recently intensified their work on Nord Stream 2," he said.

"From 26 March, these two vessels should not appear in our waters. Otherwise, we reserve the right to detain them for inspection."

Poland is an ardent supporter of US sanctions against Nord Stream 2 because the Russian subsea gas pipeline, once built, may force the country to import Russian pipeline gas from Germany at higher cost, as the Kremlin may order a halt in gas supplies to Poland via existing eastern pipelines.

Poland currently buys the bulk of its pipeline gas using a shorter transit route from Russia via Belarus, with some Russian gas deliveries coming via Ukraine.

Poland's worries

According to Poland’s state-controlled player PGNiG, gas imports from the east accounted for 66% of the total gas flows into the country in last year's fourth quarter, while deliveries across its borders in the west and south, mostly from Germany, accounted for just 12%.

PGNiG said that supplies of liquefied natural gas via a terminal in the Baltic port of Swinoujscie accounted for the remaining 22% of gas imports.

Last year, PGNiG obtained a major reduction in the contractual price of gas that is sold to the company by Gazprom, following a series of arbitration battles with the Russian gas monopoly.

The Polish producer said in its latest annual financial statement that, despite a steep drop in gas sales in the second and third quarters of last year, its revenues declined by just 7% to 39.2 billion zloty ($10 billion).

However, net income rose by over five times to 7.3 billion zloty as PGNiG’s bottom line was boosted by a $1.5 billion arbitration award payment from Gazprom.

Russians optimistic

Russian officials are adamant that the Gazprom-owned operator of Nord Stream 2 will be able to complete construction of the remaining offshore segments in Danish and German waters before the end of this year.

The operator has mobilised two Russian-owned pipelay vessels — Fortuna and Akademik Chersky — together with several other supporting ships for the offshore job.

The Fortuna was added to a US sanctions list earlier this year.

According to Russian state news agency RIA, Gazprom chairman Viktor Zubkov said the completion rate of the offshore pipeline route is close to 92%.

Zubkov flew to Berlin at the end of last week in an apparent attempt to reaffirm the Kremlin’s readiness for dialogue with German authorities that continue to support the exclusion of Nord Stream 2 from any new sanctions against Russia.