Exclusive: US tells European companies that they run the risk of sanctions on the Nord Stream 2 pipeline

WASHINGTON (Reuters) – The US State Department this month told European companies it suspects they are helping build Russia’s Nord Stream 2 pipeline that they face sanctions as the outgoing Trump administration prepares a final round of punitive measures. against the project, two sources said Tuesday.

“We are trying to inform companies of the risk and urge them to withdraw before it is too late,” a US government source said on condition of anonymity.

The US source said the State Department is expected to publish a report by Thursday or Friday on the companies it believes are helping the Russia-Germany pipeline. Companies that may be in the report include those that provide insurance, help lay the subsea pipeline, or verify the project’s construction equipment, the source said.

Companies could be at risk of US sanctions under existing law if they don’t stop work.

Zurich Insurance Group may be listed in the report, the source said. The company did not immediately respond to a request for comment.

The $ 11 billion pipeline, one of Russia’s most important projects in Europe, has ignited tensions between Washington and Moscow.

The Trump administration opposes Nord Stream 2, which would deprive Ukraine of lucrative transit taxes, saying it would increase Russia’s economic and political leverage over Europe. The administration also pushed exports of US liquefied natural gas to Europe, a fuel that competes with the gas pipeline. from Russia.

The Kremlin says Nord Stream 2, led by the state-owned energy company Gazprom, is a commercial project.

Germany, Europe’s largest economy, also says the pipeline is purely commercial. It needs gas because it closes coal and nuclear plants for environmental and safety reasons.

US President-elect Joe Biden opposed the project when he was vice president under Barack Obama. It is unclear whether he would be willing to compromise on the project after January 20, when he takes over.

Gazprom halted construction of Nord Stream 2 for a year after US sanctions in December 2019. But work has resumed as Gazprom hopes to complete the Nord Stream 2 pipeline under the Baltic Sea to double the capacity of the existing line. The project was 90% completed with only a 100km deep water stretch off Denmark to be completed.

A U.S.-based industry source who saw the State Department communications said European companies, including German companies, received the inquiries. from the Trump administration in recent months, dating back to October, on activities related to Nord Stream 2.

The State Department asked the companies in October if they were involved with Nord Stream 2 and if any work continued after July 15 and the value of any services or support.

On that date, US Secretary of State Mike Pompeo warned investors in Russia’s Nord Stream 2 and Turkstream pipelines that they could be subject to sanctions under the Countering America’s Adversaries Through Sanctions Act of 2017.

On January 1, the State Department contacted an urgent request again, the industry source said, asking to arrange a call that weekend with Deputy Assistant Secretary of the Office of Energy Resources, Melissa Simpson, to discuss the company details. ‘relax activities.

The State Department did not immediately respond to a request for comment.

Reportage by Daphne Psaledakis and Timothy Gardner; written by Timothy Gardner; Editing by Kim Coghill