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    US Bill Threatens Nord Stream 2 Sanctions

Summary

The draft legislation is the latest uptick in tensions.

by: Tim Gosling

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US Bill Threatens Nord Stream 2 Sanctions

A US bill threatening sanctions against ships laying the Nord Stream 2 pipeline is set to be introduced to the Senate, reports said May 13.

Drafted by Texas Republican Ted Cruz and New Hampshire Democrat Jeanne Shaheen, both members of the Senate Foreign Relations Committee, the draft legislation represents the latest efforts in Washington to block the Russian-led gas route to Germany.

The 55bn m3 pipeline, which is being built beneath the Baltic Sea, has become a major source of tension between the US and Germany, as the Trump administration seeks to press Europe to diversify its gas supplies, in particular by buying US LNG. Washington has previously threatened sanctions against the European partners helping to finance the Gazprom-led project: Uniper, Engie, Shell, OMV, and Wintershall.

The new bill would seek to sanction companies involved in laying deep-sea pipelines for Russian energy projects, reports Foreign Policy. Under the bill, those selling or leasing boats for use in Nord Stream 2’s construction would be subject to a US travel ban, and any assets in the United States would be frozen. The bill also allows for a range of penalties to be imposed on providers of financial or technical support services or insurance to the vessels.

The legislative proposals, which apply to all vessels used in laying pipelines at depths of 100 feet or more for Russian energy exports, could also impact the further construction of the Turkish Stream gas pipeline, suggest reports. 

Germany threatened in late April that it would reconsider plans to start importing US LNG if Washington uses sanctions in a bid to block Nord Stream 2. It says the project is purely commercial, and is needed to ensure import volumes as European gas demand rises.

However, opponents say the project will increase dependence on Russian gas - particularly in central and eastern Europe - and therefore the Kremlin’s political leverage. They add that current capacity is sufficient.

Russia has said it wants to halt exports through Ukraine. State monopoly Naftogaz Ukrainy said in early May that it has filed a complaint to the European Commission against Gazprom claiming that Nord Stream 2 is an abuse of the Russian company's market dominance.