German State to Create Foundation to Facilitate Nord Stream 2 Pipeline Completion

FRANKFURT (Reuters) — The German state of Mecklenburg-Vorpommern plans to set up a foundation to facilitate the completion of the Nord Stream 2 (NS2) pipeline to bring Russian gas to Germany and to fend off the threat of increased U.S. sanctions that halted work last year.

The $11 billion pipeline would double the existing Nord Stream pipeline's capacity and has become a focal point of Russia's confrontation with the West.

The United States has said Europe is undermining its energy security by increasing its reliance on Russian gas, while Russia says the United States is using sanctions to block the pipeline and protect its own natural gas industry.

A spokesman for the state premier's office in Schwerin confirmed media reports that the local coalition, made up of Chancellor Angela Merkel's conservatives and Social Democrats, aimed to launch a public sector foundation.

Public sector broadcaster NDR said earlier the body would boost the role of renewables and gas as a bridging technology towards cleaner fuels and shield the companies involved from U.S. sanctions.

"I can confirm that the state government intends to set up a foundation for climate protection to be considered by a cabinet meeting today (Wednesday) and that the state parliament is due to consider it at a meeting tomorrow," a spokesman for the state premier's office said.

Details of the body's wider objectives would emerge later, but a contribution to finishing NS2 was included in its agenda, he said, adding approval by the state parliament was needed because public sector capital is involved.

It would be far harder for the United States to target a state-backed foundation with measures such as freezing funds, than private companies.

NS2 is more than 90% completed.

The Gazprom-led Nord Stream 2 consortium is expected to start laying a remaining 100 km (62 mi) stretch in Danish waters from Jan. 15.

The final 2.6-km stretch in German waters has been finished, Refinitiv Eikon data tracking movements of pipe-laying ships indicated in December.

Western partners are Uniper, BASF's, Wintershall Dea, Royal Dutch Shell, Austria's OMV and Engie.

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