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    US Hints at NS2 Sanctions


Swiss court ruling hits Gazprom as US raises threat of sanctions again.

by: Dalga Khatinoglu

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US Hints at NS2 Sanctions

A week after a Swiss court ordered Nord Stream operators not to make payments to Russian giant Gazprom, the US envoy to the European Union threatened November 13 that Washington could yet impose new sanctions to block the construction of Nord Stream 2 (NS2).

The US ambassador to the EU Gordon Sondland announced November 13 that Washington has not yet taken full measures against NS2, but can take further steps to affect it significantly or even stop it.

US says NS2 would make EU more dependent on Russia, while Gazprom says it would reduce transit fees and hence prices for Europea. NS2 announced November 6 that over 200 km of pipeline have been laid in the Baltic Sea to date. Gazprom CEO Alexei Miller says the project will be built, despite US attempts to derail it.

Payment problems

A Swiss court ordered the Nord Stream (I and II) partners to make payments due to Gazprom to the Swiss bailiffs instead, as part of legal dispute between Russian giant Gazprom and Ukraine’s Naftogaz. At time of press, none had commented to NGW.

The five shareholders of the Nord Stream consortium are Gazprom (51% of stakes), German Wintershall (15.5%), E.ON subsidiary PEG Infrastruktur (15.5%), Dutch Gasunie (9%) and French Engie (9%). 

Gazprom is the sole shareholder of the €9.5bn ($10.7bn), 55bn m3/yr Nord Stream 2 line, but it is only paying half the costs;Engie, Austrian OMV, Anglo-Dutch major Shell and Germany's Uniper and Wintershall sharing the other half equally. They told NGW in April that funding the project was on track, despite US threat of sanctions.

According to Gazprom's Eurobond offering statement, released November 9, a Swiss court has banned any payments by the operators of the Nord Stream and Nord Stream 2 pipelines to Russia's Gazprom at the request of Naftogaz. The chairman of the Gazprom board of directors Viktor Zubkov told Russian news agency Tass that Gazprom would challenge the Swiss court's decision.

Swedish court ruled two months ago that Naftogaz is entitled to recover $2.6bn from Gazprom. Naftogaz has already witheld a small amount of money it had to pay Gazprom, as part of that total.

Gazprom plans to invest up to $20bn this year and it has borrowed billions since 2017. Gazprom's 2018 investment program covers all its strategically important projects including: the Chayanda field development and related construction of the Amur gas processing plant and the Power of Siberia pipeline; TurkStream and NS2 pipelines; developing the gas transport system in northwest Russia; and domestic supply projects.

Research firm GlobalData said November 14 it expects Gazprom to invest almost $170bn between 2018 and 2025, of which some $40bn upstream – much more than rivals state-controlled Rosneft and the private concern Novatek. 

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