The US is imposing sanctions on Russian ships concerned in Reuters’ Nord Stream 2 pipeline

By Timothy Gardner and Daphne Psaledakis

WASHINGTON (Reuters) – The United States imposed sanctions on a ship involved in the construction of the Nord Stream 2 pipeline to bring Russian to Europe on Tuesday when the Trump administration tried on its last full day in office to Put pressure on the project.

The US Treasury Department said it had imposed sanctions on the Russian pipe-laying ship “Fortuna” and its owner KVT-RUS in accordance with the American Opponents Act (CAATSA).

Nord Stream 2, which aims to double the capacity of the existing Nord Stream subsea gas pipeline, would bring gas to Europe via Germany, bypassing Ukraine, thereby removing lucrative transit fees from Kiev.

The project is a growing point of contention between Moscow and Washington. The United States, keen to sell Europe more exports of liquefied natural gas, says Nord Stream 2 will increase Russia’s economic and political influence over Europe. Moscow and Germany say it is a commercial project.

“The United States is not afraid to hold accountable those who continue to support and promote this instrument of Russian coercion,” US Secretary of State Mike Pompeo said in a statement.

The State Department said it would consider further measures under CAATSA and new sanctions expanded in the annual Defense Policy Bill in the near future.

Hours before the official announcement, Kremlin spokesman Dmitry Peskov told reporters that the project was under “unlawful” US pressure and that the Kremlin was closely monitoring developments to ensure the completion of the pipeline.

U.S. President-elect Joe Biden, who will replace President Donald Trump on Wednesday, has spoken out against Nord Stream 2 in the past, but it is unclear whether he could compromise on this issue after taking office on Wednesday.

Germany, which wants gas while weaning itself off of nuclear and coal-fired power plants, was disappointed with the move. “We take note of the announcement with regret,” said the spokesman for the Ministry of Economic Affairs in Berlin on Monday after Washington informed Berlin early on of the sanctions.

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Russia’s state-owned gas giant Gazprom (MCX 🙂 is leading the 11 billion dollar project with western partners Uniper, Wintershall, Engie, OMV and Shell (LON :).

Gazprom admitted in a Eurobond prospectus that Reuters saw on Tuesday that there is a risk that the project will be suspended or scrapped under political pressure.

Gazprom halted work on the pipeline in late 2019 after main pipe-laying company Allseas pulled out after Trump signed other sanctions.

Work resumed last month when a small 2.6 km section of the pipeline was built in German waters.

More than 90% of the project has been completed, but more than 100 km of pipeline remains to be laid in deep waters off Denmark in an area that requires highly specialized construction equipment.

According to Refinitive ship data, the Fortuna is still at anchor in the Baltic Sea near Rostock in northern Germany.

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