The U.S. slapped sanctions on Swiss-registered Nord Stream 2, the consortium behind the pipeline of the same name that has come into the focus on sanction action following Russia's recognition of the two breakaway regions of Lugansk and Donetsk in Ukraine.
And more sanctions on Russia could be coming after Russia attacked Ukraine earlier on Thursday. President Joe Biden announced post-attack that the world will "hold Russia responsible". Biden is expected to unveil new sanctions at noon ET today.
The additional measures Biden could take include restrictions on large financial institutions, sanctions on more members of Putin's inner circle, or cutting Russia off from advanced tech.
Earlier this week, Germany's Chancellor announced the certification of the pipeline would be suspended even though previously he had noted that Nord Stream 2 would be kept separate from anything Germany decides to do with regard to the situation in Ukraine.
"We now have to reassess the dramatically changed situation: This also applies to Nord Stream 2," Scholz said on Tuesday, adding that "The certification cannot take place now."
"Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers," said President Joe Biden a day later.
"These steps are another piece of our initial tranche of sanctions in response to Russia's actions in Ukraine. As I have made clear, we will not hesitate to take further steps if Russia continues to escalate," he also said, as quoted by Reuters.
Reuters noted in its report on the news that the sanctions did not extend to former Germany Chancellor Gerhardt Schroeder, who is the head of the shareholder committee of Nord Stream AG.
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U.S. State Department spokesman Ned Price told media that as a result of the sanctions, Nord Stream 2 is "no longer part of the equation," Al Jazeera reported.
"That is now an $11bn prize project that is a piece of steel at the bottom of the ocean," Price also said.
Nord Stream is a 55-billion-cu-m pipeline under the Baltic Sea and is the twin of the already operating Nord Stream 1. The project has been controversial since its inception, with Ukraine accusing Russia of building it in order to bypass Ukraine as a transit route and strip it of much-needed transit fees. Central European countries and the Baltics, for their part, claimed the new pipeline would increase European dependence on Russian gas.
By Irina Slav for Oilprice.com
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And contrary to claims that Nord Stream 2 gas pipeline is now a piece of steel at the bottom of the ocean, the United States can’t kill Nord Stream 2. It failed to stop its construction and it will fail to kill it.
Nord Stream 2 is here to stay because it is extremely vital for the European Union’s (EUs) future energy security particularly Germany’s.
Germany’s suspension of Nord Stream 2 gas pipeline is cosmetic since the pipeline has been anyway sitting idle since its completion in September 2021. If, however, Germany decides to stop it completely, it will be the biggest loser since this will sink more than 150 German companies who have contributed more than half of the cost of building Nord Stream 2 estimated at $11 bn. Furthermore, it will be a major blow to Germany’s future energy security since it depends on Russian oil and gas for 65% of its needs.
And to complicate matters, Russia may decide to cancel its current agreement with Ukraine to ship 45 billion cubic metres (bcm) of gas supplies via Ukraine.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
And so it is, with pleasure, that I will watch a challenged world rally and redirect, and slowly bring Putin down. He will wish that he could be safe in his palace on the Black Sea instead of becoming one of the most reviled persons in history.