Russia-Europe Gas Pipeline Faces New U.S. Sanctions

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The controversial 1,230-kilometer (km) Nord Stream 2 gas pipeline from Russia into Europe is facing a new round of sanctions from the U.S.

A number of U.S. senators, Republican and Democrat, announced a bill last week to expand existing sanctions on the Nord Stream 2 and Turkish Stream (TurkStream) natural gas pipelines. The Protecting Europe's Energy Security Clarification Act comes six months after the first round of sanctions signed by President Donald Trump. Those sanctions forced Swiss-based pipe-laying and decommissioning firm Allseas, which was responsible for pipe-laying on Nord Stream 2 and TurkStream, to stop working both projects to comply. For additional information, see January 6, 2020, article - U.S. Sanctions Stop Nord Stream 2 Pipe-laying.

The new legislation aims to stop the completion of the project by extending sanctions to include penalties on companies involved in pipe-laying activities and those offering underwriting services, insurance or reinsurance services. It adds sanctions related to companies offering any services or facilities for the vessels being used, including welding equipment, retrofitting or tethering of the ships. Senator Ted Cruz said it "makes clear those involved with vessels installing the pipeline will face crippling and immediate sanctions."

However, the project is almost complete according to Russian Energy Minister Alexander Novak, with just 160 km to go, and it could still be commissioned this year. The Russia-owned pipe-laying ship Academic Cherskiy has spent months travelling to German waters near the port of Mukran, the logistics terminal for the pipeline.

Nord Stream 2 comprises two parallel pipelines running 1,230 km for the transport of gas from Russia via Germany to Europe. It passes through Finnish, Swedish, Danish and German marine areas before going ashore at the German coast. The pipelines can transport 55 billion cubic meters (Bcm) of natural gas per year, doubling the capacity of the existing Nord Stream pipeline. Russia's oil and gas major Gazprom (PINK:OGAZPY) (Moscow) holds a 50% stake in the 9.5 billion-euro ($10.5 billion) pipeline, and the rest is owned by five European Union (EU) shareholders, including Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), OMV AG (OTC:OMVKY) (Vienna, Austria), BASF/Wintershall (Ludwigshafen, Germany) and ENGIE (EPA:GSZ) (Paris, France).

The Russian ambassador to the United States stated that he remained confident in the implementation of Nord Stream 2, despite the proposed sanctions. "In the last two days, the wave of economic sanctions against Russia in relation to 'Nord Stream 2' has started again. I can say one thing: the project will be implemented, despite all the obstacles that the United States creates for us," said Anatoly Antonov.

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