Ukrainian state gas company Naftogaz has welcomed new U.S. sanctions against the Nord Stream 2 gas pipeline, which now targets services and funding to pipe-laying vessels, Kallanish Energy reports.
The U.S. Department of State published on Tuesday expanded guidelines on sanctions under the Protecting Europe’s Energy Security Act (PEESA). The guidance now covers “foreign firms or persons who provide certain services or goods that are necessary or essential to the provision or operation of a vessel engaged in the process of pipe-laying for such projects.”
Such activities include providing services or funding for upgrades or installation of equipment for those vessels. Persons engaged in certain activities prior to the issuance of this guidance may have a 30-day, “good-faith wind down” period.
“This makes clear that the U.S. will sanction all companies that provide services or seek to upgrade the capabilities of the Russian pipe-laying vessel Akademik Cherskiy or any other Russian pipe-laying vessel for the purposes of Nord Stream 2 construction,” said Naftogaz.
The Ukrainian firm added it will continue working closely with partners in Washington, Brussels, Berlin and elsewhere “to ensure that Nord Stream 2 is never completed.”
Washington is targeting Gazprom’s Nord Stream 2 and TurkStream gas pipelines, claiming “Russia uses its energy export pipelines to create national and regional dependencies on Russian energy supplies, leveraging these dependencies to expand its political, economic, and military influence, weaken European security, and undermine U.S. national security and foreign policy interests.”
“These pipelines also reduce European energy diversification, and hence weaken European energy security,” the Department of State said in a statement.
Moscow sees the sanctions expansion as a “hostile takeover competition” by the U.S, which is harming bilateral relations.
Kremlin spokesman Dmitry Peskov said on Wednesday: “In general, this rather unfriendly and destructive policy of constant introduction of various restrictions in relation to us, our economic operators, our economy, unfortunately, this has already become an integral part of unfair competition, undisguised hostile takeover competition on the part of Washington.”
Sanctions can hit 120 companies
Nord Stream 2 will transport 55 billion cubic meters per year (Bcm/y) of Russian gas to Germany across the Baltic Sea. The project led by Gazprom, with the financial support of five European energy companies, is 94% complete.
A total of over 2,300 kilometers of the pipeline has been laid, but construction was halted late last year after U.S. sanctions pressured Swiss pipe-laying company Allseas to stop work on the project.
A spokesperson for Nord Stream 2 AG told Kallanish Energy on Wednesday that the project is fully permitted and built in accordance with applicable national and international legislation. She pointed that the US sanctions are described by the European Commission as “breach of international law.”
“There is an increasing rejection of extraterritorial sanctions by European governments, the EU and business associations,” she added. “If imposed, they (sanctions) could directly hit more than 120 companies from more than 12 European countries.”
Nord Stream 2 AG said developers and supporting companies are convinced that “the soonest possible commissioning of the pipeline is in the interest of “Europe’s energy security, European consumers, EU economic competitiveness, and climate protection commitments.