US threatens sanctions on European companies for alleged participation in Nord Stream 2

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File image of workers at the construction site of the Nord Stream 2 gas pipeline near the town of Kingisepp, Leningrad oblast, Russia. June 5, 2019. REUTERS / Anton Vaganov

By Timothy Gardner and Daphne Psaledakis

WASHINGTON, Jan 13 (Reuters) – The US State Department this month told European companies it suspects of helping to build Russia’s Nord Stream 2 pipeline that they face the risk of sanctions as the outgoing administration of Trump is preparing a final round of punitive measures against the bill, two sources said Tuesday.

“We are trying to inform companies of the risk they are running and urge them to withdraw before it is too late,” said a US government source on the condition that their identity not be revealed.

The source indicated that the State Department will issue a report by Thursday or Friday on the companies that it says are helping to build the pipeline. The firms range from insurers to companies in charge of the subsea installation of the gas pipeline.

The Zurich Insurance Group could be featured in the report, the source said. The company did not immediately respond to a request for comment, and neither did Nord Stream 2.

The $ 11 billion pipeline – one of Russia’s most important projects in Europe – has caused tensions between Washington and Moscow. The Trump Administration opposes its construction, which would deprive Ukraine of lucrative transit rights, arguing that it would increase Russia’s economic and political influence over Europe.

In that sense, the Trump administration has also boosted exports of liquefied natural gas from the US to Europe, a fuel that competes with piped gas from Russia.

The Kremlin says Nord Stream 2, run by state energy company Gazprom, is a commercial project. Germany, the largest economy in Europe, also defends that position.

The president-elect of the United States, Joe Biden, opposed the project when he was vice president of Barack Obama and it is unknown what his attitude will be in this regard as of January 20, when he takes office.

(Information by Daphne Psaledakis and Timothy Gardner; written by Timothy Gardner; edited by Kim Coghill; translated by Jorge Martínez)

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