US Moves To Sanction Russia-led Gas Pipeline Nord Stream 2

U.S. lawmakers have included sanctions on companies helping Russia’s gas giant Gazprom to complete the Nord Stream 2 pipeline project in the National Defense Authorization Act for the U.S. defense in 2020.

The sanctions in the bill, which U.S. lawmakers must pass to authorize defense expenditures, would target subsea construction vessels that lay the pipeline and managers at firms connected with those vessels, two people familiar with the bill told Bloomberg.

U.S. lawmakers have sought to pass a bill to levy sanctions on the Nord Stream 2 project, which the United States sees as further undermining Europe’s energy security by giving Russian gas giant Gazprom another pipeline to ship its natural gas to European markets.

Germany, the end point of the Nord Stream 2 pipeline, looks at the economic benefits of the project, while the U.S., including President Donald Trump, have been threatening sanctions on the project and even on Germany over its support for the project.

The U.S., several European countries, including the Baltic states and Poland, as well as the European Union (EU), have expressed concern about Russia using gas sales and its gas monopoly in Gazprom as a political tool.

But in October this year, Denmark granted the Gazprom-led project permission to build the pipeline through Danish territorial waters, which cleared the final major hurdle to the construction and start-up of the pipeline that has been dividing Europe and drawing criticism from the U.S. for years.

Currently, the pipeline is expected to come on stream in the middle of 2020, Russia’s Deputy Prime Minister Dmitry Kozak said last month, adding that construction of the project was 80 percent complete.

Potential sanctions from the U.S. could delay the start-up of the project as they could complicate the subsea pipe laying work with contractors. It is not clear yet if and how U.S. sanctions could impact European companies that are partially financing the project—ENGIE, OMV, Shell, Uniper, and Wintershall DEA.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Saudi Aramco Shares To Start Trading On December 11
  
• Russian Oil CEO: OPEC+ Cuts To Keep Oil Between $55 And $65
  
• Canada's Oil Crisis Isn't As Bad As It Seems