US sanctions new blow to NordStream 2

Nord Stream 2: The future of Gazprom’s controversial plans to build a second natural gas pipeline under the Baltic Sea to Germany was cast in doubt this week after the US Senate added new restrictions on companies investing in pipeline projects for oil and gas. The new  sanctions – which also target the privatisation of state-owned assets and carry the threat of restrictions on Russian sovereign debt and derivatives – could affect Russia’s ability to finance the Nord Stream 2 pipeline, which is set to start pumping gas from Russia to Europe in 2019.
US opposition to the pipeline, which critics say is a geopolitical power play by Gazprom to increase its dominance of Europe’s energy supply, has prompted corporate  lawyers at the project’s European partners Shell, Engie, OMV, Wintershall and Uniper –  who have agreed to pay half of the project’s $10.5bn cost – to begin checking the legal framework of the sanctions. 

Happier days: Signing off on the Nord Stream 2 contract in Vladivostok, September 2015 Kurt Bock ( BASF), Klaus Schaefer (E.ON), Pierre Chareyre (ENGIE), Alexey Miller (Gazprom) Rainer Seele (OMV), Ben van Beurden (Royal Dutch Shell), Matthias Warnig (Nord Stream)

The new broadside from Washington could renew nervousness and discomfort among foreign investors in the country that followed the imposition of the original sanctions. Many companies, such as oil major ExxonMobil, suspended Russian investment projects while banks cut off financing to local businesses. 
“It sanctions those who invest or support the construction of Russian energy export pipelines,” Mike Crapo, a Republican senator from Idaho who co-authored the amendment, said of the new proposal.
 “This is about creating a threat,” said an executive at a company targeted by the sanctions. “They have opened their toolbox again.”
The governments of Germany and Austria immediately criticised the vote, saying that the amendment heralded a “new and very negative quality in European-American relations….Europe’s energy supply is a matter for Europe, not the United States of America,” it said in a joint statement issued by Germany’s Foreign Minister Sigmar Gabriel and the Austrian chancellor Christian Kern.
The Senate also voted to sanction any individual who invests $10m or more, or facilitates such an investment, in a sale of Russian state-owned assets. If passed into law, this could heavily restrict the ability of US investors to take part in privatisations of Russian companies, either as buyers or brokers. 

Source: FT