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Europe is continuing its plan to ban Russian gas imports by the end of 2027, which would effectively limit Moscow’s energy future in the region and leave a host of stranded assets in its wake.
The two submarine gas pipelines Nord Stream 1 and 2 were the first victims of Russia’s invasion of Ukraine. be sabotaged at the end of 2022 and the latter pipeline – which cost $11 billion to build and was intended to double flows of cheap Russian gas to Germany – was never certified for use.
There has been speculation that major energy infrastructure could eventually be resurrected if, or rather when, the war between Russia and Ukraine ends and a peace deal is reached between the parties.
However, talks to establish the basis for a ceasefire are moving at a snail’s pace, with neither side willing to take the plunge. “red lines” concerning the permanent surrender of a territory, whether sovereign or occupied. Speaking with the British news site UnHerdVance said Monday that while the United States was “trying to resolve this issue,” he “wouldn’t say with certainty that we’re going to come to a peaceful resolution.”
Hopes for a deal have led to questions about what economic and energy ties could be restored between Russia and the rest of the world and, when it comes to Europe, whether a ceasefire could lead to a deal. reintegration of Russian gas and the resurrection of the Nord Stream gas pipelines.
Such a move would be highly controversial and divide the continent, given Russia’s full-scale invasion of Ukraine in 2022 and attempts in the region to wean itself off cheaper Russian gas.
In 2021, before the war, Russian imports represented about 45% of European gas consumption. This year, estimates are for imports of 13%.
Ukraine would be outraged by any move that would benefit its invader, and Poland has called for the pipelines – one of which was never used – to be “dismantled”.
That said, Ukraine itself benefited from an older pipeline running through the country because it collected transit fees. The Russia-Ukraine gas transit agreement expired at the end of 2024, with both countries choosing not to renew it due to the war. The Nord Stream pipelines were specifically designed to bypass Ukraine and avoid such costs, but the transit deal could be one of many levers to be used in negotiations if the tap is reopened.
The United States would likely be reluctant to return Nord Stream as it hopes to oust Moscow and increase its market share of liquefied natural gas (LNG) sales to Europe. But Germany, which is directly connected to the pipeline and whose industries are struggling with high energy costs, may find it difficult to resist the lure and return of Russian gas supplies.
The European Council and Parliament reached a provisional agreement in December on regulations aimed at phasing out imports of Russian gas. It is expected to implement a total ban on liquefied natural gas (LNG) and pipeline gas imports starting in late 2026 and fall 2027, respectively.
Is the Nord Stream recoverable?
The Danish Energy Agency in January authorization granted for Nord Stream 2 to carry out preservation works on its damaged pipelines located in Denmark’s exclusive economic zone (EEZ) in the Baltic Sea.
“The aim of the work is to prevent further gas eruptions and the ingress of oxygenated seawater, which could potentially lead to corrosion,” the agency told CNBC, although work to preserve Nord Stream 2 has not yet started.
The permit was granted subject to a number of conditions, the agency said, intended to ensure safe operation of the pipeline. He added that, among other conditions, the company must submit an annual plan for the pipeline installation “so that the Danish Energy Agency can continuously monitor the company’s plans for the future of the installation.”
“In addition, all conditions of these permits would have to be met before the pipelines can be put into operation. The Danish Energy Agency has not received any such requests,” he added.
But are Norstream pipelines now salvageable?
Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center, told CNBC that the pipeline that was damaged in the sabotage incidents would have to be replaced in part and that the remaining pipeline in good condition would not cost “much money at all” to resurrect.
“I think they’re still repairable, salvageable. So you might have to cut a few miles off [the damaged] pipeline and replace it. But it could be done,” he told CNBC in October.
“It could easily cost $1 billion or something like that, but there’s still a [pipeline] to the task force so that it can be used,” he said. When asked if the pipelines – which are filled with stagnant gas – are currently maintained, Vakulenko replied: “They are not maintained at all.”
Can Europe still tolerate Russian gas?
The big question is whether Europe will be able to resume its purchases from Russia.
“Each of the Nord Streams [pipelines] were 55 million cubic meters. So there are 27.5 million cubic meters left… and this is probably the maximum that Europe would be willing to buy from Russia,” Vakulenko said.
He said that if there was a change of government in Russia and Putin was no longer president, Europe would be “very willing to buy Russian gas”, but not if in the same quantities as before.
“So Nord Stream would be useful. But it’s [a] very big ‘IF’,” he added.
“On the one hand, Europe, or at least there are parties [countries] in Europe, which, for a number of reasons, would not hesitate to have at least part of Russian gas in the European energy mix, to not depend too much on American supplies. Russia is the cheapest supplier to Europe,” he said.
The continent has not fully recovered from the energy crisis caused by the large-scale invasion of its neighbor. The Dutch securities transfer mechanism, the main European benchmark for natural gas prices, was double its pre-war prices at the start of 2025, according to the IEA. Energy constraints are further aggravated by the race for AI, which has shifted public discourse from energy transition towards energy addition.
“So if you’re not too squeamish about buying Russian gas, if you don’t have to hold your nose while buying it, then of course there are many commercial and economic reasons why [to do it]. If it becomes politically and ethically acceptable, then there will be many incentives to do it, but it is again for the moment when there will actually be some rapprochement between Russia and Europe, and that is [a] big ‘if,'” Vakulenko said.
However, Tancrede Fulop, a utilities and renewables analyst at Morningstar, told CNBC that it would be too difficult to re-enter Russian gas, at least in the short term, due to new European legislation. He noted, however, that the legislation provides certain exceptions for Hungary and Slovakia in emergency situations.
This change in policy is also explained by a desire for energy independence after the “militarization of gas supplies” by Russia, the EU said. As a result, member states will likely avoid excessive reliance on a single state in the future and instead invest in strengthening overall national capacity.
Does Russia want European business?
Another question that arises is whether Russia will want to sell its gas to Europe.
“Everyone thinks the energy crisis started with the war in Ukraine, but it actually started in 2021,” Fulop said, pointing to several factors responsible for a cold winter, low wind speeds and therefore high gas consumption.
Adding to the crisis is the fact that the EU was slow to authorize the operation of Nord Stream 2. “And this is how Russia began to reduce the gas flows sent to the EU”, before the start of the war, he said. This suggests that Russia’s move may have been aimed at increasing pressure on Europe to pick up the pace of Nord Stream 2.
On the other hand, “Russia is not in a very strong negotiating position,” according to Vakulenko. “For Russia, this gas is a stranded resource. So we can expect that [that Europe] could negotiate a good deal.
Russia also views Asia as an alternative partner to Europe and has deepened ties with China via the Power of Siberia gas pipeline.
Even if a peace deal with Ukraine were reached, “the message is quite alarming” about another potential conflict with Russia, Fulop said, given the failure to respect European airspace in last months.
Ultimately, a new Russian gas boom “does not seem to be the most realistic scenario.”
The recent drop in gas prices is helping, he added, perhaps because market observers are anticipating a peace deal. The EU will also benefit from the new export terminals in the United States
“It’s bearish for gas prices, positive for Europe, and it could offset the end of Russian gas imports,” Fulop said.
