Sparks fly and machines whirr as workers in Mukran near Berlin prepare thousands of steel pipes that will become part of a vast undersea pipeline bringing gas from Russia to Germany's northeastern Baltic coast.

The Nord Stream 2 project will double the amount of natural gas Russia can funnel directly to the heart of Europe from newly tapped reserves in Siberia, intentionally skirting eastern European nations like Poland and Ukraine.

It also promises much-needed jobs in this poor German backwater, some three hours' drive north of Berlin.

The United States and some other German allies have bristled at the project, warning that it could give Moscow greater leverage over Western Europe.

Energy-poor Germany already relies heavily on Russian gas and so far Chancellor Angela Merkel has deftly kept the new 11 billion US dollar pipeline off the table while imposing sanctions against Russia for its aggression against Ukraine.

But as plans become closer to reality, the pressure has increased on her.

Last month after meetings with Ukrainian President Petro Poroshenko she acknowledged that Nord Stream 2 was more than just a business project, saying that "political factors have to be taken into account."

With Merkel heading to Sochi on Friday for talks with Russian President Vladimir Putin, a senior US diplomat warned that proceeding with the project could result in sanctions for those involved.

Jens Mueller, a spokesman for Nord Stream 2, dismissed concerns from the US and several European countries, saying the new pipeline would merely be one of many sources of natural gas for Europe.

"The competition within the domestic market is working and therefore this pipeline cannot be used to blackmail or negatively affect any country," he said.

Merkel's trip to the Black Sea resort of Sochi, her first visit to Russia in a year, will be a diplomatic balancing act.

While the German leader has taken a hard line on what the West considers hostile Russian actions in recent years - from the conflicts in Ukraine and Syria to the chemical attack on a former Russian spy in Britain - Germany badly needs to secure its gas supply and Berlin has calculated that Nord Stream 2 offers the best deal.

Europe's biggest economy is also the world's biggest importer of natural gas and its needs are likely to grow.

Germany's chemical industry alone uses more gas than the country of Denmark. Chemical giant BASF is a major investor in Nord Stream 2.

Under Merkel, Germany has also set itself an ambitious goal of switching off all nuclear plants by 2022. While renewable power is on the rise, coal forms the bedrock of Germany's energy mix, a fact that's not compatible with the country's pledge to sharply reduce carbon emissions.

At full flow, the twin pipes of Nord Stream 2 will pump 55 billion cubic metres of gas to western Europe each year, the same as its predecessor Nord Stream 1, which runs from the Russian city of Vyborg under the Baltic to the German city of Greifswald, already provides. The additional gas is needed to fill a projected decline in supply from Norway and the Netherlands, as those countries' reserves wane.

The aging Ukrainian Gas Transmission System, meanwhile, is a Soviet-era relic in bad need of upgrading and unlikely to be competitive in the foreseeable future. Its loss would be a severe blow to Kiev, which earns up to two billion euros a year from transit fees - some two percent of the country's gross domestic product.

A deal that keeps Kiev in the mix could help normalise relations between Ukraine and Russia, Moscow and Berlin.