Biden to greenlight sanctions on Russia's Nord Stream pipeline firm: Report

The US government is expected to announce that it will allow sanctions to move forward on the company tasked with building Nord Stream 2 gas pipeline, a report in CNN said Wednesday.

Citing US officials, the report said the move is part of a series of penalties the US and its allies have imposed on Moscow in response to Russian President Vladimir Putin's recognition of two breakaway regions in eastern Ukraine as independent.

The $11 billion ambitious project meant to supply Russian gas under the Baltic Sea to Germany was finished last September but has been awaiting certification by Germany and the European Union.

Nord Stream 2 AG, which faces a new round of sanctions, is a registered Swiss company whose parent firm is the Russian state-owned gas giant Gazprom.   

Gazprom owns the entire pipeline but has paid half the costs, with the rest shared by Shell, Austria's OMV, France's Engie, and Germany's Uniper and Wintershall DEA.

SCOOP: The Biden admin is expected to announce today that it will allow sanctions to move forward on the company in charge of building Russia's Nord Stream 2 gas pipeline, Nord Stream 2 AG, and its CEO after blocking such sanctions last year using a national security waiver.

— Natasha Bertrand (@NatashaBertrand) February 23, 2022

The White House on Tuesday said the development of Nord Stream 2 was "not moving forward at this point in time" after the announcement by Germany to stop the Baltic Sea gas pipeline project.

German Chancellor Olaf Scholz on Tuesday said his government has taken steps to halt the approval process for the Nord Stream 2 gas pipeline from Russia over the simmering crisis in Ukraine.

Scholz told reporters in Berlin he had asked his economy ministry “to withdraw the report on the security of supply with our federal networks agency”, calling it “the first step to make sure the pipeline cannot be certified at this point”.

“We will reassess the situation that has evolved over the past few days. It’s important to launch new sanctions now to prevent an escalation and a disaster,” he added.

It came a day after Putin said Moscow would recognize two breakaway regions in eastern Ukraine – Donetsk and Luhansk – as independent, prompting sharp reactions from the Western governments.

Russian officials have repeatedly said the project could provide relief to the European energy market, which has been grappling with tight supplies and soaring prices. 

However, the United States has from day one strongly opposed the project, claiming that the pipeline will increase Europe's reliance on Russian energy supplies.

US senators say sanctions on Nord Stream 2 could harm relations with Germany

US senators say sanctions against Europe

In May last year, the Biden administration imposed sanctions against 13 ships and three Russian organizations involved in the project.

The CNN report said President Biden and the State Department's top energy official, Amos Hochstein, had long been opposed to the project. But they feared that imposing harshest penalties on it would derail the US' relationship with Germany, which said the pipeline was just a commercial project.

With Germany now agreeing to halt the pipeline's certification indefinitely, the US “feels freer to allow the congressionally-mandated sanctions to move forward”, the report noted.

The move is likely to be met with bipartisan support.

“Democratic and Republican lawmakers have long seen the pipeline as a potential threat to Europe because Russia has used its control over energy supplies to pressure countries in Eastern Europe, including Ukraine, by shutting off those supplies, even in winter months,” the report stated.

Daleep Singh, the deputy national economic council director said Tuesday that the halting of Nord Stream 2 "sacrifices what would have been a cash cow for Russia's coffers," and "will relieve Russia's chokehold over Europe through its supply of gas, and it's a major turning point in the world's energy independence from Russia."

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