New EU sanctions could leave Gazprom and Novatek without gas supplies to Europe
Europe threatens sanctions against Nord Stream 2. But how can officials harm the already destroyed gas pipeline? Should Gazprom be afraid of new restrictions and how will they affect ordinary Russians?
European officials are preparing for the upcoming Russian-Ukrainian negotiations and are doing everything to retain at least some influence on the situation. If Russia does not agree to a 30-day ceasefire, the European Commission may impose sanctions against Nord Stream 2.
But the gas pipeline is already idle: one of the two lines was blown up, and Germany, which was receiving gas from the Russian Federation, has refused to supply and is now buying fuel from Norway. What could be worse?
EU officials are preparing to impose sanctions against Nord Stream 2. Photo: kremlin.ru
It sounds surprising now, but the European authorities have not yet imposed any official sanctions against the gas pipeline or Gazprom itself. Only the US has taken such a step.
The first restrictions appeared back in 2019 under the Donald Trump administration. At that time, sanctions were imposed on companies involved in the construction of the gas pipeline, including the Swiss Allseas. This greatly complicated the work and delayed the construction for a year.
In Europe, only Poland has individually imposed sanctions against two vessels registered in its country involved in construction work.
The first to fall under US sanctions was the Allseas pipelayer for Nord Stream 2. Photo: BoH / Wikimedia
And in February 2022, after Russia recognized the DPR and LPR, Joe Biden imposed sanctions on the Swiss-registered gas pipeline operator Nord Stream 2 AG, a wholly owned subsidiary of Gazprom. That wasn’t the end of it, and in December 2024, the Biden administration imposed further sanctions on 11 companies and 17 vessels associated with the project.
Europe, despite the incessant rhetoric about rejecting Russian energy supplies, left a window of opportunity for resuming gas supplies.
The EU authorities have not yet imposed sanctions against Nord Stream 2 AG. Photo: Gazprom
In early May 2025, the European Commission finally presented a roadmap for refusing energy resources from the Russian Federation. There are no specific proposals or prohibitions yet, but in general terms the situation is as follows: by the end of 2027, all long-term contracts with Gazprom and LNG supplier Novatek must be completely terminated. New long-term contracts cannot be concluded starting in 2025. At the same time, transactions on the spot market, which currently provide up to a third of supplies, will be blocked.
European terminals will stop accepting LNG from Russia in 2027. Photo: s2foto
There are bans and restrictions from all sides, but we cannot discount the US, which intends to take control of Nord Stream 2. Such a plan would formally make Russian gas American and resume supplies.
Things have been going well for the US lately: Nord Stream 2 AG was preparing for bankruptcy, meaning US investors had a chance to buy the operator that was going under the hammer for a low price. And sanctions are not a problem: America imposed them, and America will lift them.
But on May 9, 2025, a court in Switzerland approved a settlement agreement between Nord Stream 2 AG and creditors. This means that the forced sale of the operator's assets is canceled.
Swiss-registered operator Nord Stream 2 AG has avoided bankruptcy. Photo: Alexey M / Wikimedia
New sanctions from the EU could veto any deals with Nord Stream 2 AG. Under Joe Biden, it was hard to imagine that Europe and the US would enter into an economic standoff, but with Donald Trump, even the most improbable scenarios are becoming reality.
Scaring off American investors is the main goal of the new sanctions, as European Commission spokesperson Paula Pinho openly admits .
— Yes, Nord Stream 2 is not operational at this stage, but you never know how the situation may develop. That is, the introduction of sanctions against all persons involved in the consortium would be a signal that it is not worth even considering the possibility of investing in Nord Stream 2. This is the idea behind these sanctions.
The EU fears an escalation of the trade war with the US. Photo: Rawpixel
However, after such statements, EC President Ursula von der Leyen quickly backed down a bit. According to her, the new initiative will be discussed with the US. The experience of recent months shows that in response to any irritant, Trump can declare a trade war on anyone.
The transfer of Nord Stream 2 under US control could be a lifesaver for Gazprom: it gives a chance to increase gas supplies to Europe even after the rules banning imports of Russian energy resources come into force.
Last year, 16.7 billion cubic meters of gas were delivered to the countries of Southern and Southeastern Europe via the Turkish Stream. Hungary and Slovakia are actively resisting new restrictions and will most likely block the adoption of such laws. However, European authorities may impose prohibitive duties on Russian gas – import will simply become unprofitable. A simple majority of votes is enough for this.
In 2024, gas supplies to Europe via Turkish Stream amounted to 16.7 billion cubic meters. Photo: Gazprom
Gazprom will most likely lose the opportunity to export these 16.7 billion cubic meters. However, the resumption of Nord Stream 2 will allow up to 27.5 billion cubic meters of gas to be pumped to Europe annually.
For Alexey Miller, the Western market is not yet lost. But Leonid Mikhelson with his Novatek will find himself in a losing situation. In two years, LNG supplies will be impossible, either under long-term or short-term contracts.
The only option for Novatek to maintain a presence on the European market is to re-export liquefied gas via China. Companies from the PRC are already reselling part of the LNG supplied to them. However, this route will make the fuel more expensive, and discounts will have to be given.
Leonid Mikhelson will have to look for options for LNG supplies to Europe through intermediaries. Photo: Roscongress
And the issue of year-round delivery of LNG from the Yamal LNG and idle Arctic LNG 2 projects to China via the eastern route of the Northern Sea Route still remains unresolved. There are simply not enough ice-class tankers for this.
The first such domestic vessel, the gas carrier Alexey Kosygin, began sea trials at the end of last year. But monitoring of the position of ships shows that the tanker has been idle in the port of Bolshoy Kamen near the Zvezda shipyard since April 19.
It is unknown when it will start operating. And even more so, there is no information yet on the readiness of subsequent vessels. In total, the Arctic LNG 2 project should be serviced by 15 ice-class tankers.
The first domestic ice-class LNG tanker, Alexey Kosygin, is idle in the port near the shipyard. Photo: vesselfinder.com
Our energy companies should definitely not count on Europe anymore. And a turn to the East is a long and expensive project. Gazprom will have to invest trillions of rubles in the construction of Power of Siberia 2, and Novatek will have to hope for a full launch of the eastern route of the NSR.
And how will the new European restrictions affect millions of Russians? Oddly enough, this is a rare case when the rule "the worse, the better" applies. Western sanctions may push Gazprom to speed up the implementation of Power of Siberia 2, and the gasification of Siberia and the Far East depends on it. Until there were external incentives, Gazprom was in no hurry to develop domestic demand for blue fuel.
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