U.S. Congress mulls new sanctions against Nord Stream 2

Monday, 02 March 2020
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Lawmakers in the U.S. Congress are preparing to hit European investors in the Nord Stream 2 pipeline with a new set of sanctions in an effort to derail the project as Washington seeks to sell more US LNG to Europe.

Uniper, Winterhall, Engie, OMW and Shell are invested in the Baltic Sea interconnector, and the sanctions could come as soon as February or March.

Determined to stop the completion of the controversial Russian-German gas interconnector, the U.S. Congress already threatened to levy sanctions against construction and pipe-laying companies involved in the project. Allseas, a Swiss pipelay firm, consequently suspended works. Just 160 km of the 2,460 km long pipeline is left to be laid. AllSeas' deep sea pipe laying ship Solitaire has been laying most of Nord Stream-2 but the Swiss company has now suspended works.

The Nord Stream consortium, a purely commercial entity, stressed it remains focused on bringing the $11 billion pipeline project to a “successful end. Russia vowed to complete construction works anyway. A pipe-laying vessel named Akademik Cherskiy, currently moored in the port of Nakhodka, is widely expected to carry out the work. However, the Russian President Vlamimir Putin cautioned recently that the pipeline may not start flowing gas until the first quarter of 2021.

ROI likely to come “later” but at “higher level”

Austria’s OMV, one of the investors in Nord Stream 2, has already financed around Eur700 million of its share in the project. Chief executive Rainer Seele remains calm, saying “we are not expecting high cash calls from the Nord Stream 2 company in 2020.” The delay, in his view, means that the Return on Investment (ROI) would come "a bit later" but at a higher level.

The Russian gas giant Gazprom is financing half of the project worth about 9.5 billion Euros ($10.5 billion). Other partners in the project are Austria’s OMV, the German firms Uniper and Wintershall, Royal Dutch Shell and France’s Engie. The European project partners have each invested between 950 million and 9.5 billion Euros into the project, adding up to 50 percent of total cost. 

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