U.S. Considers Support for Gazprom’s Nord Stream Revival to Alleviate European Energy Expenses

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The U.S. and Russia are in talks to perhaps bring back the Nord Stream pipeline, a key channel for Russian natural gas to Europe that has been inactive as 2022.

Russian Foreign Minister Sergei Lavrov recently hinted at these discussions, suggesting that the U.S. might play a role in reviving this crucial energy link. The Nord Stream system,managed by Gazprom,was vital for European energy needs until sanctions were imposed following RussiaS actions in Ukraine.

If the pipeline is restored, it could supply nearly one-third of Europe’s gas requirements again. Though, this revival faces critically important hurdles due to political pushback from various European leaders and potential adjustments needed for U.S.sanctions on Russian energy.

One idea on the table involves an American company stepping in to purchase the infrastructure of Nord Stream. This would necessitate lifting or easing sanctions against Gazprom and Nord Stream 2 so that this American entity could facilitate transactions—buying Russian gas and selling it to utilities across Europe.

Interestingly, while one of the pipelines from Nord stream 2 remains intact and ready for use with proper approvals, fully operationalizing the system would require fixing three others damaged during sabotage incidents last year.

Should operations resume, we might see a notable drop in European energy prices; analysts predict wholesale gas costs could plummet from $14 per million British thermal units (MMBtu) down to around $6 per MMBtu—the baseline production cost for American liquefied natural gas (LNG).

Lavrov pointed out that soaring energy prices have put European businesses at a disadvantage compared to their U.S. counterparts who enjoy lower domestic rates.

This year has been especially tough on Europe’s energy supply; an exceptionally cold winter led to an additional consumption of 10 billion cubic meters (bcm) of gas. Consequently, EU storage levels dipped down to just 35%,