Nord Stream 2 to press on with Europe gas pipe, despite U.S. sanctions

MOSCOW (Reuters) - The group behind Nord Stream 2 said on Saturday it aimed to complete a pipeline to boost Russian gas supplies to Europe as soon as possible, after U.S. sanctions prompted a major contractor to suspend pipe-laying activities.

FILE PHOTO: Allseas' deep sea pipe laying ship Solitaire lays pipes for Nord Stream 2 pipeline in the Baltic Sea September 13, 2019. Picture taken September 13, 2019. REUTERS/Stine Jacobsen/File Photo

U.S. President Donald Trump signed a bill on Friday that included legislation imposing sanctions on firms laying pipe for Nord Stream 2, which seeks to double gas capacity along the northern Nord Stream pipeline route to Germany.

Washington, which has been seeking to sell more of its own liquefied natural gas (LNG) to European states, has said Nord Stream 2 will make Europe too reliant on Russian supplies.

Gazprom, Russia’s state-controlled gas giant and a major backer of Nord Stream 2, already supplies more than a third of Europe’s gas needs. The company declined to comment.

Nord Stream 2 will help Russia bypass Ukraine, the main route for Russian gas. Moscow and Kiev, which have been at loggerheads over Russia’s annexation of Crimea in 2014, agreed a new transit deal this week after long-running talks.

The Nord Stream 2 pipeline, which will run along the Baltic Sea floor, was expected to start up in the first half of 2020.

“Completing the project is essential for European supply security. We together with the companies supporting the project will work on finishing the pipeline as soon as possible,” Nord Stream 2 said on Saturday. It did not provide details.

German Finance Minister Olaf Scholz said Berlin “firmly rejects” U.S. sanctions but would not retaliate.

Nord Stream 2 contractor, Swiss-Dutch company Allseas, announced on Friday it had suspended pipe-laying activities.

The company said it would “proceed, consistent with the legislation’s wind down provision” and said it expected guidance on the regulatory, technical and environmental issues from the U.S. authority.


Russia’s Foreign Ministry said in a statement on Saturday that Moscow “will continue to implement its economic projects regardless of anyone’s sanctions.”

A senior Russian senator also said the Nord Stream 2 must stick to its schedule.

Russia and Ukraine, embroiled in a political row and legal disputes, agreed their new gas transit deal shortly before the existing pact expires at the end of this year.

Moscow had initially insisted on a short-term agreement to run until Nord Stream 2 came on stream. Ukraine, which earns hefty revenues from gas transit fees, wanted a long-term deal.

Moscow and Kiev said on Saturday the new deal would last at least five years and could be extended for a further 10. They said it would include increased gas transport fees and set out gas volumes to be booked for transit through Ukraine.

Nord Stream 2, which aims to double the Nord Stream route’s existing capacity of 55 billion cubic meters (bcm) of gas a year, is owned by Gazprom, which is financing half of the project worth about 9.5 billion euros ($10.5 billion).

Other partners in Nord Stream 2 are Austria's OMV OMVV.VI, the German firms Uniper UN01.DE and Wintershall BASFn.DE, Anglo-Dutch energy major Royal Dutch Shell RDSa.L and France's Engie ENGIE.PA.

Reporting by Maria Grabar, Vladimir Soldatkin in Moscow and Timothy Gardner in Washington, and by Paul Carrel in Berlin; Writing by Andrey Kuzmin/Katya Golubkova; Editing by Edmund Blair