A Nord Stream pipeline operator stands on October 8, 2012 on a platform overlooking the diagnostic cleaning plant before the opening ceremony of the North Stream second gas link in Portovaya bay, some 60 kms (37 miles), from the town of Vyborg in northwestern Russia. The Nord Stream pipeline consortium on October 8 launched a second gas link between Russia and its main European consumers, doubling its capacity to 55 billion cubic meters per year. AFP PHOTO/OLGA MALTSEVA (Photo credit should read OLGA MALTSEVA/AFP/GettyImages)
A worker on the Nord Stream pipeline between Russia and Germany via the Baltic © AFP

A controversial German pipeline deal with Russia has attracted a new adversary in Matteo Renzi, the Italian prime minister, whose frustration with the project is complicating efforts to extend the EU’s economic sanctions against the Kremlin.

Mr Renzi last week blocked an effort to roll over the measures against Russia for another six months amid irritation at Germany’s insistence on moving forward with the pipeline, which largely follows the same path as the original Nord Stream pipeline, and its refusal to allow Brussels to review the project, known as Nord Stream 2.

Mr Renzi’s resentment over Germany’s championing of the plan has risen to such a level that his team has informed aides to Donald Tusk, the European Council president, that he wants to discuss the issue at Thursday’s EU summit, according to two senior EU officials.

The Italians believe Nord Stream 2, backed by senior members of German chancellor Angela Merkel’s government, runs contrary to the spirit of the sanctions campaign against Russia and amounts to a powerful Germany putting its economic needs ahead of the bloc’s collective diplomacy.

“We are strong on sanctions, but on the other hand a number of countries, or companies, are able to double [the size of] Nord Stream,” one Italian official said.

The $11bn Nord Stream 2 project, which Russian gas monopoly Gazprom announced in September with a consortium of five European companies, would connect Germany and Russia through the Baltic Sea, bypassing the three Baltic countries as well as Poland.

It has risen up the EU agenda in recent weeks after the Obama administration joined an increasingly vocal group of central and eastern European countries in objecting to the plan.

The original Nord Stream pipeline has long been seen as a geopolitical betrayal by many of the EU’s ex-Communist, eastern member states — especially after Gerhard Schröder, the German chancellor who advocated the pipeline, joined Nord Stream’s board after leaving office.

Critics of the new project argue that the existing Nord Stream pipeline can only operate at 50 per cent capacity because it violates EU competition regulations, obviating any commercial need for doubling its size. Instead, they believe the project is part of a Russian strategy to build pipelines that bypass Ukraine, which would diminish the war-torn country’s strategic importance.

Map: Nord Stream pipeline

Berlin has so far resisted the pressure to block the plan by insisting it is a commercial deal without government involvement or advocacy.

But a Poland-led group of easterners has also been pushing for a debate at Thursday’s summit, raising the prospect of southern and eastern countries ganging up on Germany.

Despite their discontent, EU officials said they still expected sanctions against Russia to be extended after the discussion at the summit — a decision that would be based on Moscow’s failure to fully adhere to the terms of a ceasefire agreement seeking to end the conflict in eastern Ukraine.

In his letter on Tuesday to EU leaders inviting them to the summit, Mr Tusk said he had asked EU ambassadors to pass the measure on Friday, after the summit concludes.

Italy has often been among the strongest advocates for resuming normal commercial relations with Moscow; it is the second largest EU trader with Russia.

But Rome remains angry at Brussels’ decision to kill South Stream, another Gazprom pipeline project that was to bring Russian gas to Europe through Italy.

Italian oil group Eni was a major investor in South Stream, but Moscow cancelled the project last year after the European Commission repeatedly questioned construction contracts struck within EU transit countries, such as Bulgaria. Since the cancellation of South Stream, the Kremlin has attempted to reroute the pipeline through Turkey — but TurkStream became the victim of recent Russo-Turkish tensions over the downing of a Russian fighter over Turkish airspace.

Despite the EU’s role in killing South Stream, German leaders have publicly insisted Brussels has no authority over the Nord Stream 2 project since it will be built through international waters.

Miguel Arias Cañete, the EU’s energy commissioner, has said EU law gives Brussels the right to approve the pipeline and suggested it could undermine EU policies aimed at diversifying energy supplies away from Russia.

But officials said German allies within the European Commission have challenged whether Brussels can issue the final legal go-ahead.

Additional reporting by Alex Barker in Brussels and Henry Foy in Warsaw

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