US ramps up sanctions threats on Nord Stream 2

The US has ramped up its threats of sanctions against any companies involved in the construction of Russia's controversial Nord Stream 2 gas pipeline, as the Trump White House intensifies its efforts to prevent the project's completion.

Nord Stream 2 will carry gas from from Russia, across the Baltic Sea to Griefswald in Germany. The project is owned by Russian state-owned energy provider Gazprom though around half the funding has come from European energy groups OMV, Shell, Uniper, Engie and Wintershall.

“It’s a clear warning to companies that aiding and abetting Russia’s malign influence projects will not be tolerated,” said US Secretary of State Mike Pompeo. “Get out now, or risk the consequences.”

He warned that those involved in the project could now face sanctions under a revision to the US’s 2017 CAATSA (Countering America’s Adversaries through Sanctions) law.

The 1,200 km (754 mile), €10bn gas pipeline has been a bone of contention between Berlin and Washington with the former accusing the latter of interfering in its energy policy. On its part, the Trump administration, buoyed by strong bi-partisan support in Congress over the issue, has argued that sanctions are necessary to push back against Russia and that Nord Stream 2 would lead to an over-dependence on Russian gas in Europe.

Critics of the US' approach say that the White House's stance is more about wanting the EU countries to buy more LNG (liquified natural gas) from American companies than protecting the continent's energy needs.

Towards the end of last year, President Trump gave the OK for sanctions to be imposed on companies involved in the project, mainly on those laying pipes. Work came to an abrupt halt in December.  

Beset by legal problems and sanctions, the project appears to be back on track following the decision by Denmark earlier this month to allow the final stretch of the pipeline to be laid in the country's waters.

Only around 120 km of pipeline is left to complete.

During a hearing in the German parliament earlier this month, US sanctions were panned by lawmakers. 

Michael Harms, the head of the German Eastern Business Association, said the new sanctions could affect 120 companies from 12 European states, and many would feel forced to pull out.

“We’re talking about direct and grave interference in Germany and Europe’s sovereignty and energy policy,” said Niels Annen, minister of state in Germany’s foreign ministry.

Back to Homepage

Back to Energy & Utilities