US threatens sanctions against Nord Stream 2 contractors as construction goes at full drive

Published time: 9 Jan, 2019 11:58Edited time: 9 Jan, 2019 12:09

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The US may slap penalties on two European contractors laying the pipeline for the Russian-led Nord Stream 2. The political pressure is still extremely high over the project, which Moscow defines as purely economic.

Swiss-based Allseas Group and Italian Saipem may face US sanctions over firms participating in the highly debated project on behalf of its operating company, Gazprom-owned Nord Stream 2 AG, sources in the German federal government told Handelsblatt.

Allseas will reportedly lay over 90 percent of the controversial pipeline, while Saipem already completed its part of the work.

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Pipe-laying for Russia's Nord Stream 2 begins in Finland and Sweden

Nord Stream 2 is being implemented by Russian energy giant Gazprom in close partnership with German oil and gas firms Wintershall and Uniper, French multinational Engie, British-Dutch energy corporation Royal Dutch Shell, and Austrian energy company OMV.

The Trump administration has repeatedly expressed its disapproval of the Nord Stream 2 pipeline project, pledging to impose secondary penalties on European companies working with the Gazprom-led enterprise. On Monday, US Ambassador to Germany Richard Grenell told the media that the firms working on the pipeline “are always in danger, because sanctions are always possible.”

Washington claims that the pipeline, which is set to run from Russia to Germany under the Baltic Sea and is projected to double the existing pipeline’s capacity of 55 billion cubic meters a year, undermines Europe’s energy security and stability. Nord Stream 2 will reportedly provide transit for 70 percent of Russian gas sales to the EU.

Smaller members of the bloc have persistently opposed the project, which is crucially important for Germany and other EU nations. Poland, Latvia, Lithuania, Romania, and Hungary have severely criticized the project.

Ukraine, which used to benefit from the gas transit from Russia to Europe, is standing strong against Nord Stream 2, as successful implementation of the project will deprive its budget of transit fees.

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According to Handelsblatt, Berlin is deeply concerned over the fact that the White House is threatening to set up serious obstacles to the vital energy project. The German authorities are reportedly trying to exert their influence on Washington to stop its interference in European energy policies.

Construction of the Nord Stream 2 pipeline project has been approved by Germany, Finland, and Sweden, with the works scheduled for completion in late 2019. Denmark is the only country that hasn’t authorized the project so far. Last year, Nord Stream 2 AG said the consortium could avoid the Nordic state’s territorial waters if it didn’t get permission.