U.S. Threatens To Expand Sanctions On Nord Stream 2 As Russia Moves To Complete Pipeline

[Rogue Valley]

U.S. Threatens To Expand Sanctions On Nord Stream 2 As Russia Moves To Complete Pipeline

7/15/20
WASHINGTON -- The United States has threatened to sanction any individual or company helping Russia build a controversial natural gas pipeline to Germany as the Kremlin moves to complete the last kilometers of the nearly $11 billion project. “Get out now -- or risk the consequences,” U.S. Secretary of State Mike Pompeo said July 15 during a press conference in Washington announcing the new sanction guidelines for the Nord Stream 2 pipeline. The State Department essentially removed language that excluded the pipeline from the powerful Countering America's Adversaries Through Sanctions Act (CAATSA), which was passed in 2017. Unable to use CAATSA, the United States in December passed legislation to sanction any vessel laying underwater pipes for the Nord Stream 2 pipeline, forcing Swiss-based Allseas to quit the project with just about 160 kilometers remaining. The pipeline, which consists of two parallel lines running under the Baltic Sea, is a combined 1,230 kilometers in length. Russia is now trying to use its own vessels to finish Nord Stream 2 after receiving permission from Denmark earlier this month. The unfinished portion of the pipeline lies in Denmark’s economic waters. However, the Russian ship would still need to use the services of Western companies, such as port facilities and insurance, giving the United States the potential to hamper their efforts.

Pompeo said the State Department is updating the public guidance for CAATSA authorities to include the two Russian-led projects, which he described as “Kremlin tools” to expand European dependence on Russian energy supplies and undermine Ukraine. Pompeo is set to visit Denmark on July 22 to discuss the pipeline, among other issues. Nord Stream 2 would pump up to 55 billion cubic meters of natural gas to Germany annually upon its completion, doubling the European nation’s import of Russian gas. The project enables Moscow to significantly reduce natural gas shipments through Ukraine, which currently earns billions of dollars annually in transit fees. The United States is seeking to export more natural gas to Europe while helping Eastern and Central Europe develop the necessary infrastructure to reduce their dependence on Russian oil and gas. State Department spokeswoman Morgan Ortagus told RFE/RL in an interview that Russia and Gazprom are in a "difficult position" to be able to finish Nord Stream 2. "Companies basically have to choose -- you can do business with the Russians and Gazprom or you can do business with the United States. We think that companies will make the decision that it is more lucrative to do business with the United States," she said.

Nordstream-2 is basically a Kremlin tool to: (1) Increase European dependence on Russian energy products and (2) Increase Moscow's political leverage over Europe and (3) Exclude the US from European energy sales and (4) Reduce the amounts of Russian energy exports to Europe that transit Ukraine.

Although Russia and Ukraine signed a 5 year deal on gas transit prices/amounts in 2019, Moscow has shown since 2016 that it will renege on treaties and contracts whenever it suits the Kremlin. Even if Moscow did honor the contract, in 2024 Russia could then legally bypass Ukraine to route oil/gas exports to Europe via Nordstream-2 even though Putin assured Angela Merkel that Moscow would not utilize the pipeline to bypass Ukraine.

 

[Lord Tammerlain]

So Russia is already supplying Germany with gas, it just goes through Ukraine currently

Nordstream just allows Russia to bypass the Ukraine and save on the transit fees it pays to Ukraine.

Simple solution. Allow Nordstream to go ahead, then the Ukraine can close the pipeline and buy LNG from the US. Europe gets the same amount of gas, Ukraine is no longer dependent on Russian gas

 

[Westphalian]

Anyone with a sense of geography knows that European interests are not served by importing LNG from the US when a much cheaper, closer and environmentally friendly alternative of Russian gas is available.

The US is, through CAATSA, now starting to pressure and sanction its own allies. In doing so it is slowly but surely forcing many of its European allies to reduce their dependence on the US for the simple reason that the US is showing a very ugly face.

Even during the Cold War the Soviet Union reliably supplied gas to much of Europe. Russia continues to do the same. Germany and its European allies will press ahead and complete the pipeline in their own national interests. In Europe, US pressure looks increasingly desperate and makes Europeans question what sort of regime they are dealing with in Washington - a regime unable to come to terms with a multi-polar world.

 

[Rogue Valley]

So Russia is already supplying Germany with gas, it just goes through Ukraine currently

Nordstream just allows Russia to bypass the Ukraine and save on the transit fees it pays to Ukraine.

Simple solution. Allow Nordstream to go ahead, then the Ukraine can close the pipeline and buy LNG from the US. Europe gets the same amount of gas, Ukraine is no longer dependent on Russian gas

Ukraine already buys some LNG gas from the US (via Poland).

About 3% of Ukraine's GDP comes from transit fees. That would be a significant monetary loss and a geopolitical win for the Kremlin.

 

[Ringo Stalin]

The US house of representatives has unanimously approved an amendment to tighten sanctions against Nord stream-2 in the draft defense budget for the next fiscal year, which will begin on October 1. How good it is, that there is Russia... At least in something the political elite of the United States can be unanimous. The celebration of the Free market continue. But who cares about stinking Free market capitalism, when democracy in danger!

 

[Rogue Valley]

120 companies could be subject to Nordstream-2 sanctions under the US CAATSA legislation.

The US is also considering employing the PEESC Act to sanction companies involved in Russia's southern Turkstream pipeline project.