The completion of Nord Stream 2 is nearly a fait accompli, but Ukraine’s largest energy lobby won’t give up without a fight.
The Ukrainian Federation of Employers of the Oil and Gas Industry has signed a $1.2 million contract with U.S. law firm Arent Fox for legal and lobbying services in Washington, according to documents from the U.S. Department of Justice.
The one-year contract that started on July 16 includes “outreach to U.S. Government and Executive Branch” and “engagement with other relevant U.S. stakeholders and policymakers.”
The clauses also include legal advice “on the U.S. Government’s position going forward on Nord Stream 2” and on “U.S. sanctions and U.S. sanctions policy.” Arent Fox is the latest firm joining the ranks of Ukraine’s gas lobby in the legal battle aimed at stopping Nord Stream 2.
The federation has already hired New-York based Karv Communications since July 14 to polish the image of Ukraine’s oil and gas industry abroad.
The $420,000 contract will run for seven months until January 2022, during which time Karv Communications will help “promoting energy security issues in the U.S. economic and political media,” including Nord Stream 2-related sanctions.
On the other side, at least three firms are lobbying for Russia’s interest in the U.S., spending a combined $1 million from January to April, according to Foreign Lobby.
Ukraine hired the lobbying firms a month after U.S. President Joe Biden waived sanctions against the company building the Nord Stream 2 pipeline, and one month before Ukraine’s President Volodymyr Zelensky’s visit to the U.S. planned on Aug. 30.
Ukraine still hopes the U.S. will stop Nord Stream 2, even though the 1,230-kilometer gas pipeline, which runs under the Baltic Sea, is almost finished and Biden said sanctions would be “counterproductive.”
As soon as the $11 billion project is finished and becomes operational, Nord Stream 2 will allow Russia to bypass Ukraine’s land-based gas transit system after a current five-year agreement expires at the end of 2024.
Combined with the earlier Nord Stream 1 pipeline launched in 2011, the transport capacity of both lines is an annual 110 billion cubic meters from Russia to Germany, depriving Ukraine of at least $1.5 billion in transit fees per year.
The U.S. and Germany have long been at odds over the risks and benefits of the pipeline. Germany views it as an economic priority and a way to import cheap energy into the country, while Ukraine perceives it as the Kremlin’s gas weapon in Europe.
The recent U.S.-Germany statement greenlighting Russia’s gas project on July 21 also infuriated Ukraine, on the sidelines of the negotiation.
Ukrainian Foreign Minister Dmytro Kuleba also released a joint statement with his counterpart in Poland, saying efforts to allay their concerns “cannot be considered sufficient,” calling on the U.S. and Germany to adequately address the security crisis in the region.
The U.S. and Germany have agreed on vague actions against Russia if it cuts off energy supplies to Ukraine, in addition to seeking European Union sanctions.
The lack of new clear sanctions from U.S. President Joe Biden’s administration attracted the attention of U.S. lawmakers. Biden is facing bipartisan backlash to the agreement, according to the news website Politico.
Russia’s state-owned gas company Gazprom owns the Switzerland-based company that operates the project and faces U.S. sanctions under the National Defense Authorization Act (NDAA) passed on Jan. 1.
But around half of the initial financing for the 9.5 billion euro ($11 billion) project has been pledged by five European energy companies, including Uniper and Wintershall in Germany, the British-Dutch giant Royal Dutch Shell, OMV in Austria and Engie in France.
So far, U.S. sanctions spared those energy giants, even though U.S. lawmakers argued it would be the most effective way to stop the project.
