US Threatens Sanctions Against Nord Stream 2

US Threatens Sanctions Against Nord Stream 2US Threatens Sanctions Against Nord Stream 2

The US stepped up its opposition to the Nord Stream 2 natural gas pipeline linking Russia and Germany, saying the project raises security concerns and that it could draw US sanctions.

"The US opposes the project because it will increase Europe’s reliance on Russia for gas supplies. It is also worried the pipeline could open ways for Russia to install undersea surveillance equipment in the Baltic Sea," said Sandra Oudkirk, US deputy assistant secretary of state for energy diplomacy, World Oil reported.

The US issued the warning just as European Union policymakers said they’re ready to erect bulwarks to shield companies from US sanctions directed at Iran. Europe’s mood is shifting from shock at Trump’s “America First” agenda to a resolve to close ranks and assert its own position.

US threats to Nord Stream 2, which has split eastern and western EU states, could impact companies in Austria, France, Germany and the Netherlands.

Royal Dutch Shell Plc, BASF SE’s Wintershall unit, Uniper SE, OMV AG and Engie SA have agreed to provide Russia’s Gazprom PJSC with financing for the project.

Speaking to reporters in Berlin, Oudkirk noted that the project could be sanctioned under a bill passed in August 2017.

"Congress passed the legislation in response to Russia’s intervention in Ukraine and its suspected US election interference, giving the government authority to act against any Russian energy projects, including Nord Stream 2," the envoy said.

“That means that any pipeline project and there are multiple pipeline projects in the world that are potentially covered is at an elevated sanctions risk."

Oudkirk said the US also opposed the pipeline due to security concerns, adding it would allow Russia to place listening devices along the pipeline’s route, although she declined to comment on specific devices.

The US official pushed back against suggestions Ukraine could receive guarantees to protect it from any loss of revenues if Nord Stream 2 diverts gas flows. German Chancellor Angela Merkel last week said the pipeline project was impossible if it leaves Ukraine vulnerable to reduced gas transit revenue, implying some form of guarantee agreement was under consideration.


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