U.S. preparing fresh sanctions to halt Russia’s Nord Stream 2

The U.S. government is preparing wider sanctions for the Russian gas pipeline project Nord Stream 2 and is urging European allies to stop the work that could help build the pipeline.

Reuters said in a report on Wednesday that the outgoing Trump administration is preparing a fresh round of sanctions in the near future that could deal a fatal blow to the Gazprom-led Nord Stream 2 project.

An unnamed government official told Reuters: “We’ve been getting body blow on body blow to this, and now we’re in the process of driving a stake through the project heart”.

Washington believes that the Nord Stream 2 pipeline compromises European energy security and its construction has become a major bone of contention between Russia and the U.S. The U.S. fears that the construction of the pipeline from Russia to Germany will bypass Ukraine, robbing it of lucrative transit fees.

The construction work continued this month, after a one-year pause due to the U.S. sanctions.

Namely, the project work was halted last December when pipe-laying company Allseas suspended operations after U.S. sanctions targeted companies providing vessels to lay the pipes.

The new work focused on the construction of the pipeline in German waters, where only a small section has been left unfinished, using the Russian pipe laying vessel Fortuna.

The vessel arrived at the construction site of the Nord Stream 2 gas pipeline in the Baltic Sea earlier in December and it is currently working in the shallow waters of the pipeline’s German zone after work resumed this month.

Meanwhile, preparations are ongoing for the continuation of the work in Danish waters and Denmark’s regulator has recently said that Fortuna would start working in its waters starting from 15 January 2021.

According to reports, the Fortuna will be helped by construction vessels Baltic Explorer and Murman along with other supply vessels.

In addition to the financial pressure, the project has also been affected by the departure of the risk management and quality assurance company DNV GL, which suspended its work on the Russian project last month for fear of the U.S. sanctions.

DNV GL decided to cease delivery of services to vessels with equipment serving the Nord Stream 2 project as its verification activities could be sanctionable under the Protecting Europe’s Energy Security Act (PEESA), under which the U.S. issued new guidelines targeting the Russian project.

The Nord Stream 2 gas pipeline project is led by Russian giant Gazprom with half of the funding coming from five European partners – Germany’s Uniper, BASF’s Wintershall, Anglo-Dutch Shell, Austria’s OMV, and Engie.

The project is designed as two parallel 48-inch lines, roughly 1,200 kilometres long, each starting southwest of St. Petersburg and ending at German coast, Greifswald.

It is designed to boost the amount of Russian gas that can be shipped to Europe without having to go through Ukraine.

The gas pipelines will have the capacity to transport 55 billion cubic meters (bcm) of Russian gas a year to the EU, for at least 50 years.