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    US Sanctions Threat Halts NS 2 Verification Work (Update)


Norwegian industrial certification company DNV GL has stopped work on NS2 in the teeth of US sanctions.

by: William Powell

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US Sanctions Threat Halts NS 2 Verification Work (Update)

(Updates with comment from NordStream 2 AG at end)

Norwegian certification company DNV GL has stopped work on the Nord Stream 2 (NS 2) project, it said November 25, in the face of US sanctions. The Washington administration in October extended the Protecting European Energy Security Act but Berlin has questioned the right of the US to interfere in European Union energy policy.

DNV GL said: "NS 2 engaged DNV GL to verify the safety and technical integrity of this pipeline system. We verify pipeline safety and integrity around the world in accordance with our independent technical Standard DNVGL-OS-F101. Our work on the NS 2 project involves reviewing documentation and observing construction activities to ensure compliance with our standard. This has included monitoring of the testing and preparation of equipment used onboard vessels during the installation of the pipeline. DNV GL is engaged to issue a certificate of compliance upon the satisfactory completion of the pipeline system.

"The US Department of State has published new guidelines for the Protecting Europe's Energy Security Act (PEESA) statute. Under these new guidelines, we find DNV GL's verification activities linked to vessels with equipment serving the Nord Stream 2 project to be sanctionable. DNV GL has therefore ceased delivery of services that may fall under the scope of PEESA. DNV GL operates a robust programme to ensure our operations are in compliance with all relevant regulations and legislation, including sanctions."

The pipeline is nearly complete with less than 160 km left and it is being financed off the balance sheets of the Russian operator and those of five western gas companies: OMV from Austria, German Uniper and Wintershall Dea, French Engie and Anglo-Dutch major Shell.

Wintershall Dea CEO Mario Mehren told reporters November 23 that he was confident that the infrastructure would be built, adding that it was necessary to supply Europe’s industry with competitively priced gas, Reuters reported.

The withdrawal of the certification body might make insurance more expensive but DNV GL declined to comment on the implications of its decision.

The Swiss-based operator of the project NordStream 2 AG also declined to comment on the specific impact of the decision  but it said the EU had found US sanctions "unacceptable" and that the European Commission "firmly opposed the imposition of unilateral sanctions against EU companies conducting legitimate business.... Such measures are unacceptable and contrary to international law," it said, citing a letter written by EC president,Ursula von der Leyen, and sent to some members of the European parliament November 3.

It is up to governments and the EC to protect European companies from illegal extraterritorial sanctions, NS 2 AG said.