US imposes sanctions on company building Russian Nord Stream 2 gas pipeline

WASHINGTON, Feb 23 (Reuters) – The United States imposed sanctions on the company building Russia’s Nord Stream 2 gas pipeline on Wednesday, broadening sanctions on Moscow after it recognized two breakaway regions in eastern Ukraine.

The sanctions, which target Nord Stream 2 AG and its CEO Matthias Warnig, are adding pressure on the Baltic Sea project that was to double gas flow capacity from Russia to Germany.

Europe’s most controversial energy project, Nord Stream 2 has not started operations pending certification by Germany and the European Union.

Germany halted the $11 billion pipeline on Tuesday, citing Russia’s actions toward Ukraine. The United States and EU fear the pipeline will increase Europe’s dependence on Russian energy supplies and deny transit fees to Ukraine, host of another Russian gas pipeline.

In a statement on Wednesday, US President Joe Biden said his administration was coordinating Nord Stream 2 action closely with Germany, adding: “Today I directed my administration to impose sanctions on Nord Stream 2 AG and its management.”

Biden added: “These measures are another element of our first tranche of sanctions in response to Russia’s actions in Ukraine. As I have made clear, we will not hesitate to take further action if Russia continues to intensify.”

The US Treasury Department has issued a general license authorizing the “liquidation” of transactions with Nord Stream 2 AG until March 2.

The sanctions did not affect Gerhard Schroeder, a former German chancellor and close friend of Russian President Vladimir Putin, who has headed Nord Stream’s shareholders’ committee since 2005.

Nord Stream 2 AG is a registered Swiss company whose parent company is Russian gas giant Gazprom. Gazprom owns the entire pipeline but has paid half the cost, with the rest shared by Shell, Austria’s OMV (OMVV.VI), France’s Engie and Germany’s Uniper (UN01.DE) and Wintershall DEA [RIC:RIC:WINT.UL].

Reporting by Jeff Mason, Kanishka Singh and Daphne Psaledakis; Editing by Doina Chiacu, Chizu Nomiyama and Howard Goller

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