US sanctions on Nord Stream 2 pipeline could freeze construction

AllSeas is a Swiss-Dutch company that operates ships that have been laying sections of the new German-Russian pipeline called Nord Stream 2.

But after US President Trump signed a bill on Friday that introduces sanctions on anyone involved in the project, it said on Saturday work will now be suspended

The US has been an outspoken opponent of the pipeline, which will transport natural gas about 1,200 kilometres. Along with eastern European countries that also oppose the project, the US government argues that it will increase Europe’s dependence on Russia for energy.

Switzerland-based Allseas said in a brief statement that “in anticipation of the enactment of the National Defense Authorization Act (NDAA), Allseas has suspended its Nord Stream 2 pipelay activities”.

The company will “expect guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant US authority,” it added.

Construction of the pipeline is already well advanced, and it wasn’t immediately clear what the impact will be. Nord Stream 2 spokesman Jens Mueller said in an emailed statement that “completing the project is essential for European supply security”.

The German government said it regretted the approval of the US legislation.

“The German government rejects such extraterritorial sanctions,” spokeswoman Ulrike Demmer said in a statement. “They affect German and European companies and constitute an interference in our domestic affairs.”

Demmer said the US measures are “particularly incomprehensible” since Russia and Ukraine have reached an agreement this week on the future transit of Russian gas through Ukrainian territory.

Ukraine has been one of the countries that oppose Nord Stream 2 because it feared being frozen out as a gas transit country as a result of the pipeline’s construction.

On Wednesday, Chancellor Angela Merkel made clear that Germany is not considering retaliation against the US sanctions.

She told lawmakers in Berlin: “I see no alternative to conducting talks, though very firm talks, (to show that) we do not approve of this practice.”

Russian President Vladimir Putin’s spokesman, Dmitry Peskov, said Wednesday that Moscow assumes the pipeline will be completed and called the U.S. move “a direct violation of international law.”

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