Sarah Marsh and Thomas Escritt

BERLIN (Reuters – Last year, a German politician created a foundation with Russian energy company Gazprom to assist Moscow in avoiding U.S. sanctions against a pipeline that would transport Russian gas into Europe.

The move adds to questions about whether the United States and Germany are on the same page over the $11 billion project – a crucial issue as the two major democracies lead NATO allies in a pushback against Russian President Vladimir Putin.

Washington imposed sanctions in 2019 on all those who were involved with Nord Stream 2’s construction. According to the United States, Russia can use this line as a weapon against Ukraine, even though it is already in construction, but not pumping any gas.

Nord Stream 2 is a direct route to Germany through the Baltic Sea. A large pipeline connecting Russia and Europe crosses Ukraine at present. Washington believes that Russia will cut Ukraine off of Europe’s oil supply by allowing the Pipe to pass through Kyiv, weakening it and making it vulnerable to Russian invasion.

Germany denies the U.S. sanction and says Nord Stream 2 is mainly a commercial venture that diversifies Europe’s energy sources. Both main party leaders in Germany have stated that the U.S. oppositions are self-interested. Washington wants to sell Germany gas.

Russia claims that the project will be commercial in nature and is not politically motivated. The sanctions, however, are unfair, and it uses them to target competitors.

The line was still completed in spite of the sanctions.

Moscow had more than 100,000 soldiers positioned on the borders of Ukraine by December. The Russian government denies planning to invade. According to U.S. officials, an attack can occur in days or even weeks.

What does the foundation look like?

The Klima- und Umweltschutz (Climate and Environment Protection Foundation) was set up in January 2021, when the pipeline was virtually complete, by the government of Mecklenburg-Vorpommern, the east German region where Nord Stream 2 makes landfall. The Foundation was founded by Manuela Schwesig (Social Democrat State Premier), and aims to increase the use of renewable energy, as well as gas, in order to bridge the gap between cleaner fuels.

The source of the money?

According to regional’s public auditor office, the Foundation was funded by 200,000 euros (or $230,000). According to a spokesperson for the company, 20 million Euros were also donated by Nord Stream 2 AG (a Swiss-based company controlled by GazpromPAO).

Nord Stream 2 stated that it would donate 2 million more euros annually to the Foundation. The Foundation’s charter states that any commercial profits will go towards its endowment.

What’s the Foundation responsible for?

The philanthropic fund supports environmental projects and, according to the statutes, also has a commercial arm. It carries out activities that are related to Nord Stream 2.

The website contains a list of environmental projects that it supports: It offers 500 euros to every child who wins a competition for ideas to make schools more climate-friendly and gives away trees to all kindergartens in the state.

According to its charter, the Foundation has the secondary objective of ensuring that Nord Stream 2 is complete regardless of any external efforts.

According to the charter, the Foundation has the ability to acquire, manage and own land as well as provide or lease tools and machinery that can help them achieve either of these goals, which includes the completion the the pipeline.

“We believe that it is right to build the pipeline,” Schwesig told reporters https://www.reuters.com/article/us-germany-nordstream-foundation-idUSKBN29B1FE in January 2021.

Others have also argued for Germany needing an alternative source of energy that does not depend upon good will from Russia or Ukraine. Advocating for the pipeline in the state parliament last January, Schwesig said https://www.dokumentation.landtag-mv.de/parldok/dokument/47662/plenarprotokoll_7_108.pdf#page=30 the U.S. sanctions were self-interested.

She stated that “Nobody is wrong in building the pipeline.” She said, “Those who try to block the pipeline in the final minute are doing something wrong.”

Former Finance Minister Olaf Scholz – now Chancellor – has rejected https://www.reuters.com/article/usa-russia-nord-stream-germany-idAFS8N28N08D the U.S. sanctions as interference in Germany’s affairs.

Is there anyone else who supports the Foundation?

Schwesig’s Social Democrat Party (SPD), which leads Germany’s governing coalition and has traditionally advocated for close relations with Russia, is the bedrock of political support for the foundation, but a politician from the opposition Christian Democrats also serves on its board – reflecting broad public backing for Nord Stream 2 in Mecklenburg-Vorpommern.

Erwin Sellering is a former state premier and SPD member who serves as the Foundation’s President. Since 2005, Gerhard Schroeder has been the chairman of Nord Stream’s shareholders’ committee. He is a former SPD Chancellor, and a close friend to Putin. Rosneft’s biggest oil producer in Russia, he is also on its board. This month, he was elected to Gazprom’s board of directors. Schroeder refused to speak to Reuters.

Which benefits can Germany expect from the new pipeline?

It would allow Russia to pump twice as much gas direct to Germany. Russian accounts for around half of Germany’s gas needs https://www.reuters.com/world/europe/how-much-does-germany-need-russian-gas-2022-01-20. Gas is the key to European manufacturing, such as ceramics and keeps half of Germany warm. The energy and water industry group BDEW estimates that gas was responsible for 15% to 15% of German electricity generation in 2013.

Was the Foundation able to assist in the construction of the pipeline?

The answer was not forthcoming.

The website provides a history of the company’s first year. It states that in order to build the pipeline, the U.S. had to counter their illegal threats with various measures. These are obvious and cannot be explained publicly.

The Foundation statute states that the person who heads Nord Stream 2’s commercial arm oversees its activities in relation to the pipeline. According to The Foundation’s statute, the person Nord Stream 2 appointed to lead its commercial arm was not disclosed to Reuters.

Public records show the foundation owns the Blue Ship https://www.vesselfinder.com/vessels/BLUE-SHIP-IMO-9381990-MMSI-210251000, a general cargo vessel built in 2006 sailing under Cypriot flag. The vessel spent most of 2020 in Russia’s Murmansk port. However, it entered the Baltic last July and has continued to be close to the port of Mukran. There are no other vessels registered with the foundation.

According to a U.S. State Department Report, the Blue Ship participated in pipe-laying on Nord Stream 2 and other sanctioned projects.

The Blue Ship did not receive sanction. According to the State Department, sanctions were not imposed on the owner of Blue Ship. A 2021 bill https://www.congress.gov/116/bills/hr6395/BILLS-116hr6395enr.pdf enacting the sanctions stated that European Union governments were excluded, as well as EU governments that were not operating as a business. The State Department didn’t provide any further details.

U.S. President Joe Biden’s administration waived https://www.reuters.com/business/energy/us-waive-sanctions-firm-ceo-behind-russias-nord-stream-2-pipeline-source-2021-05-19 some sanctions on Nord Stream 2 in May 2021 as Washington sought to rebuild ties with Germany, after relations deteriorated under former President Donald Trump.

What are the benefits to the area from the pipeline

The pipeline was constructed by hundreds of local workers. In relation to Nord Stream 2, “several hundredmillion euros” have been spent in the state. A spokesperson for Gas for Europe, the German affiliate to Nord Stream 2, stated to Reuters that the company expects to retain around 30 employees long-term.

Mecklenburg-Vorpommern houses much of Germany’s offshore wind capacity and the local government says it aims to use wind power to produce “green” hydrogen that can in future be exported through the Nord Stream 2 line.

What do the other German states think about the Foundation’s existence?

The Foreign Ministry declined to comment about the Foundation and its objectives. Former Foreign Minister Heiko Maas, who was in office when the Foundation was set up, said at the time it was “a decision made in Mecklenburg-Vorpommern, it was not a decision of the federal government.”

Regional’s public auditor office is critical of the Foundation. According to Reuters, it stated that only partial information had been provided by the state about the Foundation. It also said that this was late and that no state control had been given over public funds given to the Foundation.

Some environmentalists claim that supporting gas damages the environment, because it produces carbon from its combustion. The Foundation was described by Environment Aid, a German non-governmental organization, as “a service for Nord Stream 2 AG.”

What do you think the Foundation has to say about Ukraine?

Its president Sellering said to Reuters that the “significant forces in America and Germany” are making use of the crisis to justify the construction of Nord Stream 2 and have been against it for years.

It would be unfair for Germany to cease importing Russian natural gas, while the United States continues to import Russian raw materials.

What if new sanctions are applied to the pipeline? Will the Foundation do anything to reduce their effect?

This question was not answered by the Foundation.

Additional Reporting: Jonathan Saul, Daphne Psaledakis and Timothy Gardner in London; Andreas Rinke, Stine Jacobsen, Stine Jacobsen, and Jacob Gronholt­Pedersen in Copenhagen. Vladimir Soldatkin is Moscow. Edited and edited by Sara Ledwith