Nord Stream 2 work halts ahead of US defense bill

Nord Stream 2 work halts ahead of US defense bill
An Allseas ship working on the Nord Stream 2 pipeline in the Baltic Sea. Work has now been suspended ahead of potential US sanctions. (Reuters)
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Updated 21 December 2019

Nord Stream 2 work halts ahead of US defense bill

Nord Stream 2 work halts ahead of US defense bill
  • Nord Stream can deliver enough energy to supply 26 million households per year

WASHINGTON: Swiss-Dutch company Allseas said it had suspended its pipe-laying activities along the Nord Stream 2 Russia-to-Germany natural gas pipeline, in anticipation of US President Donald Trump’s signing of a new national defense policy bill on Friday.

The move throws into doubt the completion date of the $11 billion project, that Moscow had said would be ready in months, jeopardizing plans to quickly expand sales of natural gas to Europe via pipeline.

“In anticipation of the enactment of the National Defense Authorization Act (NDAA), Allseas has suspended its Nord Stream 2 pipelay activities,” the company said in a statement dated Dec. 21.

“Allseas will proceed, consistent with the legislation’s wind down provision and expect guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant US authority.”

The annual national defense policy bill, which Trump signed later on Friday, contains legislation imposing sanctions on companies laying pipe for the project that will double the pipeline’s capacity to Germany.

The bill calls on the administration to identify companies working on the project within 60 days to trigger the sanctions. That report will likely be completed faster than that, however, meaning that any such sanctions could be triggered earlier than expected, two US senior officials told Reuters.

Led by Russian state energy company Gazprom, the Nord Stream 2 pipeline would allow Moscow to bypass Ukraine and Poland to deliver gas under the Baltic Sea to Germany.

The Trump administration, like the Obama administration before it, opposes the project on the grounds it would strengthen Russian President Vladimir Putin’s economic and political grip over Europe. Russia has cut deliveries of the fuel to Ukraine and parts of Europe in winter during pricing disputes.

Washington says that Nord Stream 2 would also likely deprive Ukraine of billions of dollars in gas transit fees.

Germany says it needs the gas as it weans itself off coal and nuclear power.

The Trump administration has touted US liquefied natural gas as “freedom gas” that gives Europe an alternative to Russian supply.