Nord Stream 2

The US Department of the Treasury has imposed sanctions against three Russian legal entities that Washington suggests are involved in construction of the Nord Stream 2 gas pipeline, according to a statement released on Friday.

The entities added to the sanctions list include the Federal State Budgetary Institution Marine Rescue Service (Morspassluzhba), LLC Mortransservice, and JSC Samara Heat and Energy Property Fund.

Meanwhile, LLC Koksokhimtrans, which is also blacklisted in the US over the situation in Ukraine, has been added to the list on the pipeline under construction as well, which means if restrictions against it are removed under one of those lists, sanctions under another list will remain in force.

The US’ sanctions only affect the activities of Morspassluzhba connected with Nord Stream 2 and TurkStream pipeplines. “All transactions and activities prohibited by the Protecting Europe’s Energy Security Act of 2019, <…>, involving Federal State Budgetary Institution Marine Rescue Service (MRS), or any entity in which MRS owns, directly or indirectly, a 50% or greater interest, that are not related to the construction of the Nord Stream 2 pipeline project, the TurkStream pipeline project, or any project that is a successor to either such project, are authorized,” according to the general license published by the Department of the Treasury.

Meanwhile the waiver does not cover the vessels owned by the organization, against which the US sanctions have been imposed.

US Secretary of State Antony Blinken confirmed earlier this week that it is in American national interests not to impose sanctions on the Nord Stream 2 operator, Nord Stream 2 AG.

The Nord Stream 2 project envisages the construction of two pipelines with a total capacity of 55 bln cubic meters per year from the coast of Russia through the Baltic Sea to Germany. The works were suspended in December 2019 after the Swiss Allseas abandoned pipe-laying due to possible US sanctions. In December 2020, the construction of the pipeline resumed. As of March 31, the gas pipeline was 95% completed, with 121 kilometers left to be laid.

Washington openly opposes the construction of the Nord Stream 2 pipeline and actively assumes efforts aimed at blocking the project, mainly in a move to hit Moscow’s interests and support Ukraine as a country transiting Russian natural gas to Europe. Moreover, many experts suggest that the US is attempting thus to promote the supplies of its liquified natural gas that is far more expensive than the Russian pipeline gas, to the European market. The legislation passed in the US in the past several years stipulates the possibility of using unilateral restrictions particularly against firms participating in implementation of the Nord Stream 2 project.