U.S. imposes sanctions on vessel set to work on Nord Stream 2 pipeline

The United States on Tuesday imposed sanctions on a ship involved in building the Nord Stream 2 pipeline, as the Trump administration sought to raise pressure on the project on its last day in office.

According to a Reuters article, the U.S. Treasury Department imposed the sanctions on the Fortuna pipelayer and its owner KVT-RUS under the Countering America’s Adversaries Through Sanctions Act (CAATSA).

AIS data claims that the Fortuna pipelayer is anchored in the Baltic Sea near Rostock in northern Germany.

Nord Stream 2 will be doubling the capacity of the existing Nord Stream gas pipeline and take gas to Europe via Germany, bypassing Ukraine which would deprive it of lucrative transit fees.

The project is a rising point of contention between Moscow and Washington. The United States, which is looking to sell its liquefied natural gas to Europe, said that Nord Stream 2 would increase Russia’s economic and political leverage over Europe. Moscow and Germany both claim that it is a commercial project.

Germany, seeking to move away from nuclear and coal-fired power plants, said it was disappointed by the fresh sanctions after Washington gave Berlin early word of the action.

“The United States is not afraid to hold accountable those who continue to aid and abet this tool of Russian coercion“, Secretary of State Mike Pompeo said in a statement.

The State Department said it would consider further actions in the near term, under CAATSA and new sanctions expanded in the annual defence policy bill.

Hours before the official announcement, Kremlin spokesman Dmitry Peskov told reporters the project was under “unlawful” U.S. pressure and that the Kremlin was closely watching developments to ensure the pipeline’s completion.

With this latest development, Gazprom acknowledged that there are risks the project may be suspended or scrapped. Gazprom suspended work on the pipeline in late 2019 after the main pipe-laying company Allseas dropped out after Trump signed other sanctions.

Work resumed last month when a small 2.6-kilometre stretch of the pipeline was built in German waters.

Gazprom leads the $11 billion project with Western partners Uniper, Wintershall, Engie, OMV, and Shell. More than 90 per cent of the project has been completed, but more than 100 kilometres must still be laid in an area offshore Denmark.

Another factor is President-elect Joe Biden, who is being sworn in as the next President of the United States on Wednesday. He has opposed Nord Stream 2 in the past and Antony Blinken, Biden’s nominee to be secretary of state, stated that Biden strongly agrees with members of Congress that the pipeline was a bad idea.

Reuters further stated that Blinken told the Senate Foreign Relations Committee that he had not discussed the issue at length yet with Biden, but that the administration would use “every persuasive tool” available to persuade countries including Germany.