Russia currently supplies around 40% of the EU’s gas supplies, just ahead of Norway, which is not in the EU but takes part in the bloc’s single market.
For years, the 28-member bloc has been concerned about reliance on Russian gas.
Poland has warned that Russia could use Nord Stream 2 to harm Europe’s energy security, and US President Donald Trump even accused Germany of being a “captive” of Russia because of it.
Nord Stream 2 will only increase Russia’s supply, it also means that, along with its TurkStream project, Russia will be able to bypass Ukrainian pipelines. The loss of transit fees would hit Ukraine’s economy hard.
A big priority for the EU is to increase competition too, and instead of a patchwork of different agreements for pipelines entering the bloc it wants Nord Stream 2 to come under internal EU rules on transparency and separating ownership of the pipes from the supplier.
German businesses have invested heavily in Nord Stream 2 and former Chancellor, Gerhard Schröder is running the project.
As well as Germany’s Uniper and BASF’s Wintershall unit, other European companies have stakes too, including Anglo-Dutch Shell, OMV of Austria and Engie of France.
Chancellor Angela Merkel tried to assure Central and Eastern European states on Thursday that the pipeline would not make Germany reliant on Russia for energy.
“Germany will expand its network of gas terminals in regards to liquified gas. Meaning, for gas we do not want to be at all dependent on Russia alone,” she said.
Russian government spokesman Dmitry Peskov said Moscow hoped the disagreement would be sorted out. “We still believe that this project is beneficial to both the European gas consumers’ interests and to Russian Federation as gas supplier,” he said.