The controversial Nord Stream 2 pipeline project is in trouble again over the last few kilometers. Because the sanctions now imposed by the USA threaten to hit the companies involved in the gas pipeline through the Baltic Sea.
The Swiss-Dutch company Allseas announced early Saturday morning that the construction of the pipeline would be suspended until further notice. The company operates the special ships with which the pipes for the pipeline are laid through the Baltic Sea.
"In anticipation of the decree", further construction will initially be suspended, says a short statement on the homepage. If Allseas does not comply with the new US rules, those responsible for the company face entry bans in the USA. Any ownership of Allseas in the United States would be frozen. This would also affect Allseas' assets in Houston, Texas, as well as the company's ships that were to enter U.S. territorial waters.
In addition: With Nord Stream 2 there are only around 300 kilometers to be laid. The company should consider carefully whether it will still close the gap if it threatens to violate sanctions of the "Law for the Protection of Europe's Energy Security" - and thereby potentially build up lucrative contracts in the USA.
Federal government expresses regret
United States President Donald Trump signed and enacted the Sanctions Act on an air force base on Friday night as part of a defense budget package. The U.S. government now has 60 days to compile a list of the names of the companies and individuals affected.
Germany has "regretted the US sanctions". "The Federal Government rejects such extraterritorial sanctions," said Deputy Government Spokeswoman Ulrike Demmer. "They meet German and European companies and represent an interference in our internal affairs."
In view of the ongoing Russian-Ukrainian talks on the transit of Russian gas through Ukraine, "such US measures, which are based in particular on protecting Ukraine, are particularly incomprehensible".
With the support of the European Commission and the Federal Government, a basic agreement has been reached between Ukraine and Russia on a new gas transit contract for Ukraine from 2020. "We welcome the fact that a concrete agreement was signed on Friday."
The foreign policy spokesman for the SPD parliamentary group, Nils Schmid, spoke of a "unilateral step" that would burden relations with the United States. The sanctions would "not prevent the completion of Nord Stream 2, but only delay it".
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Meanwhile, two Republican senators Ted Cruz - who introduced the Sanctions Act - and Ron Johnson turned to Allseas chief Edward Heerema. "We understand that the Russian government Allseas is paying a very significant amount of money to complete the Nord Stream 2 pipeline," said a letter from US politicians. If the company continues "even for a single day" after signing the US Sanctions Act, it could face "potentially damaging legal and economic sanctions."
Awaiting guidance from the responsible US authority, Allseas announced in anticipation of the Sanctions Act. It is about necessary regulatory, technical and ecological clarifications, it said in the opinion published shortly before the signing of the law. They want to continue working in accordance with the legislation. Russia had accused the United States of violating international law before the law was issued and is optimistic that the pipeline, which will cost around EUR 10 billion, will be completed despite the US punitive measures.
We stand with the 15 European countries, the European Parliament and the European Commission who have concerns over Nord Stream 2. Our position is pro-Europe. #diversification https://t.co/HCCuc2MNoF
- Richard Grenell (@RichardGrenell) December 21, 2019The pipeline, which is more than 2100 kilometers long, is only a short distance away near the Danish island of Bornholm. In Denmark, criticism of the project has been great until recently: there have been several attempts to prevent the efforts by law. It was argued with overriding national interests - and approval was only granted at the end of October.
The USA, but also some Eastern European and Baltic countries, fear that Nord Stream 2 will increase the dependence of Central Europe on Russian energy. The federal government is nevertheless behind the project and hopes to be supplied with inexpensive gas - 55 billion cubic meters of natural gas should flow from Russia to Germany every year.
Nord Stream 2 is the second Baltic Sea pipeline between Russia and Germany. Behind it is the Russian state-owned company Gazprom, which is to finance half of the planned total costs of EUR 9.5 billion. The other half are financed by five European energy companies, including Wintershall-Dea, OMV, Royal Dutch Shell and the French company Engie.
