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The World’s Most Controversial Pipeline Hits Another Hurdle

DNV GL, a Norwegian risk management and quality assurance firm, told Reuters on Thursday it had suspended work on the gas pipeline Nord Stream 2 to avoid sanctions under the recently expanded U.S. sanctions on the Russia-led project.  

Last month, the U.S. Department of State said it was broadening the sanctions against service providers and those funding vessels involved in the construction of Nord Stream 2 in a fresh attempt to prevent the project from completing. 

According to the new guidance in the Protecting Europe’s Energy Security Act (PEESA), the United States is including in the sanctions companies “providing services or facilities for upgrades or installation of equipment for those vessels, or funding for upgrades or installation of equipment for those vessels.” 

DNV GL said in emailed comments to Reuters that “Under these new guidelines, we find DNV GL’s verification activities linked to vessels with equipment serving the Nord Stream 2 project to be sanctionable. DNV GL has therefore ceased delivery of services that may fall under the scope of PEESA.” 

The scope of the Norwegian firm’s work on Nord Stream 2 included a document review, observing construction to verify that standards are being met, and monitoring the testing and preparation of equipment used by pipe-laying vessels, DNV GL told Reuters. 

Related: Why The Vaccine Oil Rally Won't Last

The Nord Stream 2 pipeline is nearly finished, but there is still work to be done on pipe-laying in the territorial waters of Denmark. 

It’s unclear how the ceasing of service delivery from the Norwegian firm would affect the project. 

The United States, 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 Gazprom as a political tool.

In July, the United States warned companies helping Russia to complete Nord Stream 2 that they should ‘get out now’ or face consequences, as the Trump administration stepped up efforts to stop the construction of the controversial Russia-led pipeline in Europe. 

By Tsvetana Paraskova for Oilprice.com

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  • Bill Simpson on November 28 2020 said:
    Biden doesn't exactly love Putin either. Those US sanctions can bite private companies like a T-Rex.
  • Mamdouh Salameh on November 27 2020 said:
    Since the days of the former Soviet Union, the United States has never succeeded in derailing
    any Russian gas and oil pipelines to Europe. Nord Stream 2 is no exception.

    President Trump will not fare better than both John F. Kennedy and Ronald Reagan both of whom failed to derail USSR-backed energy-export pipelines such as the Friendship (Druzhba) oil pipeline in the 1960s and the Brotherhood (Bratstvo) gas pipeline in the 1980s respectively. And with 95% of the Nord Stream 2 gas pipeline completed, it is unstoppable.

    Furthermore, President-elect Biden should realize that the European Union’s (EU) gas market is big enough to absorb both extra Russian-piped gas supplies and US LNG exports. Therefore, a change of tack might be needed.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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