Published On: Thu, Aug 3rd, 2017

Russia accelerates pipe line construction after Trump signs US sanction package

Turkish Sream Line under Black Sea

It is reported that following US sanctions on Russia, Gazprom has decided to accelerate new pipelines for Europe. The reports say although the White House does not consider imposing sanctions on to effect Moscow’s pipeline constructions, referred sanction package may increase the cost of these lines due to an eventual increase in borrowing costs.

In return, Russia which is concerned that Western investment partners might consider withdrawing from the projects due to sanctions, has decided to accelerate the construction of pipelines

The Swiss company ALLSEAS Group, which is building the “Turkish Stream” line planned to reach Turkey under the Black Sea, has accelerated the construction on Gazprom’s request even though it is not yet clear where the pipeline will be connected in Turkey.

It is reported that Gazprom has also begun construction of a second pipeline parallel to the “Turkish Stream” line to export more gas to Europe. It is clearly understood that Russia is already building a second line, in consideration that the country might be affected by the sanctions in the future.”

Another line built by Russia is Nord Stream 2, which will reach Germany under the Baltic Sea.

Companies involved in this project have pledged $ 1.13 billion in investment to finance the 1,225-kilometer line.

The European Union has asked the US to guarantee the EU companies are be affected by sanctions to implied to Russia. On the other hand, European companies had used loans for the Nord Stream 2 line with higher interest rates than the market average due to the “risk cost” of doing business with Russia.

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