Baltic Sea Nations on Alert: Hybrid Tactics Pose an Increased Threat to Critical Gas Infrastructure

Weaponising energy for geopolitical domination

26 March 2024

Zsuzsanna Szabó

Visegrad Insight Fellow

After numerous attacks on gas infrastructure, especially in the Baltic Sea, the West must act collectively to shore up defences and create a coherent security policy focused on energy independence.

In a little more than a year, three major incidents have occurred in the Baltic region that specifically targeted critical gas infrastructures, excluding any attacks that took place in active war zones.

For years to come, natural gas markets in Europe will remain on edge due to the persistent geopolitical risk. The European Union’s coastal countries along the Baltic Sea are highly vulnerable in this regard and are likely to suffer unrest.

The pressing issue is whether NATO can prevent any potential sabotage of critical infrastructure in the region, especially on facilities conveniently located near Russia.

In this highly volatile setting, it is crucial for the region to prioritise policymaking that focuses on safeguarding critical infrastructure and ensuring a steady energy supply.

Top job for northeastern NATO bloc

A recent Foreign Policy analysis, citing Sophia Besch from the Carnegie Endowment for International Peace, highlighted the creation of a strong northeastern alliance within NATO as the most strategically significant outcome for Europe since Russia’s invasion of Ukraine.

The entrance of Sweden into NATO on 7 March marked the first time in modern history that all countries in the Baltic Sea region, except Russia, were united under one military alliance.

Nevertheless, the recently merged Baltic alliance consisting of Denmark, Sweden, Finland, Estonia, Latvia, Lithuania, Poland and Germany is now confronted with the daunting responsibility of keeping the intricate network of critical infrastructure, including undersea pipelines, liquefied natural gas import facilities, etc. safe from acts of sabotage.

While the region attempts to break away from Russian fossil fuel imports, governments are also expanding their ability to import liquefied natural gas, developing offshore wind projects and investing in undersea pipeline infrastructure.

As their numbers continue to rise, so does the potential for sabotage of critical energy infrastructure.

The Russian Navy, according to Besch, is facing financial challenges, but its underwater capabilities are on the rise. The ability to project power is still present for Russia, thanks to its naval, air and missile bases located in Kaliningrad, a Russian exclave sandwiched between Poland and Lithuania.

Even more worrying is Moscow’s proven track record of utilising energy as a tool to accomplish political objectives and has even gone as far as weaponising it.

Surge in critical infrastructure incidents

The current political climate greatly endangers the stability of natural gas markets in the coming years. If vital energy infrastructure in the region is targeted and disrupted, European wholesale gas prices could see a sharp rise, posing a threat to supply security.

Since Russia invaded Ukraine on 24 February 2022, the region has witnessed three significant episodes with the intention of damaging critical gas and oil infrastructure.

Incident: Nord Stream 1 and Nord Stream 2 pipelines blasts

The Nord Stream 1 and Nord Stream 2 pipelines, transporting gas from Russia to Germany, were severely damaged by underwater explosions on 26 September 2022.

The sabotage act, fortunately, did not put Germany’s energy supply at significant risk as Gazprom had already stopped supplying on Nord Stream 1 in early September, and the construction of LNG import terminals in Europe’s economic powerhouse was underway.

In the lead-up to Russia’s invasion of Ukraine, the German government suspended the $11 billion Nord Stream 2 project certification earlier in February 2022. As a result, the billion-dollar project has never become operational, as reported by The Washington Post.

Upon commercial start, the Nord Stream 2 twin pipes would have doubled the total Russian gas import capacity to 110 billion cubic metres per year to Germany. It would also have bypassed Ukraine, which serves as a gas transit country for many nations in Central and Eastern Europe.

Yet, the gas prices, driven up by Gazprom’s past supply reductions, had a direct impact on the expense of producing electricity, leading to increased utility charges and triggering a continent-wide struggle to afford basic necessities.

Who caused the explosion at Nord Stream?

It is still unclear who destroyed the Nord Stream pipelines. Moscow and Kyiv repeatedly denounced responsibility. The director of the Swedish National Seismic Network, Bjorn Lund, found that less than fifty kilograms of explosives equivalent to TNT were enough to detonate the pipelines.

Lund says, “The modelling we are doing [on the magnitude of the devastation at Nord Stream pipelines] suggests the amount of explosives [used] in the Nord Stream event most likely is a minor part of the energy release.”

He adds, “Most of the energy comes from the outflowing gas,” suggesting that the relatively small amount of TNT-equivalent explosives was enough to cause the initial damage to the pipelines, and the sudden release of the highly pressurised natural gas exacerbated the situation.

Shortly after the incident, Sweden, Denmark, and Germany joined forces to investigate the series of blasts. The European investigators unanimously concluded that the attack was deliberate, but the Swedish and Danish authorities were unable to find conclusive evidence about who carried out the operation.

By the end of February, Danish officials had shut down their investigation into Nord Stream explosions, becoming the second nation to cease a sabotage probe following Sweden’s decision a month before.

German investigators are looking into the role of a 50-foot yacht called Andromeda (YouTube link) that had been chartered under a false identity. The authorities suspect the yacht was used to carry the explosives to the scene, as reported by local broadcaster Deutsche Welle.

Germany is yet to announce the results of its probe.

Low-cost fuel comes with a steep price tag

Despite the clear danger, European policymakers and energy leaders appeared not to consider the geopolitical factors in their decision-making until Russia’s invasion of Ukraine in 2022.

The appeal of an affordable Russian pipeline was too great for Germany to pass up. The Nord Stream incident proved them wrong and resulted not only in losing access to cheap Russian gas but also in key industry players scrambling financially.

With no prospect of repairing the ruptured pipes and resuming Russian gas deliveries to Germany anytime soon, the main investors in the Nord Stream project – German energy companies Wintershall Dea, E.ON, the Netherlands’ Gasunie and France’s Engie – had to take the cost of the bold sabotage on the chin.

Indeed, the rise and decline of one key player in the German oil and gas industry, Wintershall Dea, exemplifies the remarkable price of this short-sightedness.

After being cut off from the pipeline that was generating the equivalent of 350,000 barrels of oil per day, the BASF subsidiary – which is the largest chemicals producer in the world – had no choice but to write off a staggering Є7.3 billion, resulting in an adjusted net loss Є4.8 billion for the 2022 financial year.

Then, in December of last year, BASF and LetterOne, an investment vehicle established by a group of Russian oligarchs under sanction—Mikhail Fridman and Petr Aven—revealed their agreement to sell Wintershall Dea’s upstream assets (exploration and production) for $11.2 billion to UK-listed Harbour Energy. BASF owns 72.7% of shares in Wintershall Dea, while the remaining 27.3% is held by LetterOne.

Germany’s unsuccessful gas relationship with Russia could serve as a cautionary tale for other Central and Eastern European nations that are still considering deals with the Kremlin and its top energy company, Gazprom, in an attempt to obtain “inexpensive” Russian fuel.

Incident:  Balticconnector gas pipeline connecting Finland and Estonia

Operations on the Balticconnector are set to be restored on 22 April, “provided that the repair and commissioning works proceed as planned,” said Finland’s gas transmission operator on 5 March, following the “incident” that cut gas supplies off to Finland at the start of October last year.

The gas pipeline connecting Finland and Estonia was taken out of operation after an unusual drop in pressure in the pipeline shortly before 2 AM on 8 October 2023.

Finland’s gas grid operator’s statement revealed that “based on observations”, there were suspicions of a leak in the offshore pipeline between Finland and Estonia.

“The valves in the offshore pipeline are now closed, and the leak is thus stopped.”

Shortly after the incident, the Finnish government announced damage to the gas pipeline and telecommunications cable between the two NATO countries, attributed to “external activity”.

By the end of October, Finland’s National Bureau of Investigation concluded that the pipeline had been ruptured when it was dragged several metres across the seabed by a loose anchor from a Chinese-owned container ship, the Newnew Polar Bear.

The Newnew Polar Bear sails under the flag of Hong Kong, but its sailing permission issued by the General Administration of the Northern Sea Route points to Russia. The permission is addressed to Torgmoll, a Russian-registered company with offices in Moscow and Shanghai, according to a document obtained by Norwegian news outlet Barents Observer.

The Balticconnector incident rocked the region as the major subsea gas pipeline is key in balancing gas supplies after Gazprom halted deliveries to Finland in 2022.

At the start of 2023, Finland’s first LNG terminal went into operation to make up for the absent Russian volumes.

The new regasification facility (converting LNG from a liquid to a gas) in Inkoo port, southern Finland, helped secure the country’s energy supply during the harsh winter of 2023/24, as the Nordic country lacks underground gas storage and domestic gas production.

Putting all our energy eggs in one basket, however, can be costly and risky. For weeks in January, Finland experienced the highest electricity prices in Europe due to a supply shortage from Sweden and the freezing weather.

Moreover, the 1-gigawatt Forsmark nuclear power plant was partially disconnected by Swedish utility Vattenfall on 3 January. The power outage resulted in a 50% decrease in electricity production until 24 January and caused a disruption in the power supply to Finland.

Incident: Key LNG pipeline breach in Germany

Germany’s recent investigation into another instance of suspected sabotage in the gas industry highlights the importance of reinforcing security measures for critical infrastructure, especially in this region.

One year after the deliberate sabotage of the Nord Stream pipelines, Dutch contractor Gasunie had to alert the police in Schleswig-Holstein, northwest Germany, that small holes caused by “external interference” were discovered on a liquefied natural gas pipeline at the end of November 2023, as reported by the German public broadcaster NDR.

At the time of the incident, construction of the 55-kilometre pipeline was in progress to connect Germany’s Brunsbüttel LNG regasification terminal near Hamburg with the northern gas grid. The German infrastructure project was in response to compensate for the lost Russian volumes by increasing its capacity to import LNG.

In January, German federal prosecutors from the Karlsruhe Federal Public Prosecutor’s Office – Bundesanwaltschaft – assumed control of the investigation into the damaged LNG pipeline, citing potential “anti-constitutional sabotage”.

The Brunsbüttel pipeline breach resulted in a delay of several weeks before the pipeline could be put into operation. Germany’s security of supply was not endangered due to the timely detection of drilled pipeline holes.

At the end of July last year, the European Commission approved €40 million in funding for building an onshore LNG import terminal at Brunsbüttel. This terminal will have a capacity of 10 billion cubic metres per year, and it is planned to start operating in 2026.

For now, a floating LNG import facility (FSRU) at Brunsbüttel guarantees the area’s gas supply.

As Germany is one of the largest gas importers globally, reducing dependence on affordable Russian fuel remains a continual challenge for the country.

Before the Russian attack on Ukraine, Germany imported 171 billion cubic metres of natural gas in 2021, while domestic consumption reached 94 billion cubic metres, as estimated by the consultancy Kpler. Russia used to supply more than 50% of Germany’s demand through three pipeline systems, including the ruptured Nord Stream 1, which has a capacity of 55 billion cubic metres per year.

The nation has rapidly constructed LNG facilities in multiple ports along the Baltic Sea to fill the void left by the decrease in Russian pipeline gas imports.

Germany aims to have a total import capacity of 54 billion cubic metres per year by 2027, depending on the number of FSRUs that remain operational once the planned onshore LNG terminals become operational.

Completion of the onshore LNG terminal at Brunsbüttel, with a capacity of 10 billion cubic metres per annum, is scheduled to start in 2026. The sizable gas infrastructure project, which is receiving a €40 million state aid package from the European Commission, is expected to replace the existing FSRU-based facilities.

Defending gas supply routes is crucial for the nation’s energy security, as about half of German homes are heated by gas.

Polish energy import capacity build-out

Germany is not the only country constructing a network of crucial infrastructure connections – such as undersea pipelines and liquefied natural gas import facilities along the Baltic Sea coastline and near the Russian enclave Kaliningrad – as a means of bolstering its energy security approach.

Poland took a major step towards decreasing its dependence on Russian gas by officially launching the Baltic Pipe, which connects the nation to Denmark and offshore gas reserves in Norway.

Terje Aasland, Norway’s Minister of Petroleum and Energy, gave the opening speech in Szczecin on 27 September 2022. This was the day after the Baltic Sea was rocked by underwater explosions that caused significant damage to the Nord Stream 1 and Nord Stream 2 pipelines.

The Baltic Pipe crosses the paths of the Nord Stream pipes southwest of the Danish Island of Bornholm and can transport 10 billion cubic metres of natural gas to Poland every year.

Building pipelines is generally costly. Moreover, the expense of fixing damaged pipes could burden taxpayers, and if there were a deliberate disruption, critical supplies would immediately cease.

The construction of the Balticconnector in 2020 had a price tag of €300 million, which, when compared to other projects, could be considered small-scale. The commission’s calculations reveal that the Polish Baltic Pipe pipeline has received funding of €267 million from the European Union.

The geographical proximity and potential vulnerability of the Polish undersea pipeline require an increase in emergency preparedness, surveillance and security measures for the country’s energy sector.

Strategic Polish diversification

Another strategic Polish energy project has been in the making in a move to expand the country’s access to non-Russian gas supplies.

At the beginning of February, Japanese shipowner MOL was chosen to provide a floating storage and regasification unit for Poland’s new liquefied natural gas import terminal in Gdansk, as announced by Polish pipeline operator Gaz-System.

The second LNG project in Poland plans to install an FSRU facility in Gdansk, like the receiving terminal already in operation at the Polish Baltic Sea port of Swinoujscie.

Upon its completion in 2027-2028, the FSRU terminal could offer a regasification capacity of 6.1 billion cubic metres per year.

The cost of constructing a floating LNG terminal in Gdansk is approximately PLN 4.7 billion (€1.1 billion), as stated by Maciej Bando, the government representative for strategic energy infrastructure, during a meeting of the lower house of parliament Sejm’s subcommittee on critical infrastructure on 22 February.

Bando mentioned the possibility of a €630 million loan from EU funds for the onshore part of the project, as reported by the Polish press agency PAP.

Energy sector increasingly targeted

Amid the ongoing conflict in Ukraine, the deliberate damage to three gas pipelines in the Baltics a little over a year ago brings attention to the protection of critical infrastructure projects in the region and the role of the newly formed northeastern NATO bloc.

With the recent incidents in the Baltic Sea in mind, NATO has acted by setting up two new organisations to strengthen CUI or critical undersea infrastructure protection.

NATO’s Secretary General, Jens Stoltenberg, revealed plans to establish the Critical Undersea Infrastructure Coordination Cell at their headquarters on 15 February 2023.

Following approval from NATO defence ministers in June 2023, Lieutenant General Hans-Werner Wiermann, the head of the new special cell, stated that the energy industry had become a prime target for hybrid warfare.

“Russian ships have actively mapped our critical undersea infrastructure. There are heightened concerns that Russia may target undersea cables and other critical infrastructure to disrupt Western life,” he told reporters at NATO headquarters in Brussels last summer.

In July 2023, during the Vilnius summit, the allies reached a consensus to form the Maritime Centre for the Protection of Vital Underwater Infrastructure under NATO’s Allied Maritime Command.

The new centre’s main objective is to identify and address strategic vulnerabilities and protect against “the coercive use of energy and other hybrid tactics by state and non-state actors.”

Sidestepping standard methods of warfare is perilous, given the ambiguity of the situation and the potential to compromise supply security. Already, Finland has experienced the severe effects of the Balticconnector rupture this winter, and other Baltic countries could suffer the same or even a worse fate if left unprotected.

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The pipeline image above uses this: FactsWithoutBias1, Nord Stream pipelines on map, Show where the pipeline has been attacked by VI Team, CC BY-SA 4.0.

Zsuzsanna Szabó

Visegrad Insight Fellow

Visegrad Insight Fellow. Zsuzsanna Szabó is a Hungarian journalist, energy expert with a decade-long experience in the industry. She writes for reputable publications across Europe.

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