Russia’s Gas Pipeline to Europe Faces Sanctions Under U.S. Defense Bill

  • Date: 12/12/19
  • The Wall Street Journal

U.S. lawmakers aim to halt $10.5 billion project, Nord Stream 2, by targeting key contractors

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U.S. lawmakers are pushing ahead with enactment of new sanctions meant to prevent the completion of a new pipeline constructed to carry Russian natural gas to Germany, beneath the Baltic Sea.

The measure could set back one of Europe’s largest energy deals for the Nord Stream 2 pipeline, which U.S. lawmakers view as a geopolitical gambit by Russia to strengthen its grip on European energy markets.

However, the sanctions, which are directed at the companies providing pipe-laying services to the pipeline, might further strain relations between the U.S. and Germany, which has lobbied against the action.

Provisions imposing the sanctions are included in the $738 billion 2020 National Defense Authorization Act, an annual Department of Defense policy bill that frequently serves as a catchall for measures unrelated to defense.

The House approved the bill on Wednesday, with a Senate vote to follow. The bill would then go to the White House. […]

U.S. officials and lawmakers have asserted Nord Stream 2 will allow Gazprom, Russia’s gas-export monopoly, to all but abandon the Ukrainian transit system that has handled most Russian gas deliveries to Europe for decades.

The $10.5 billion Nord Stream 2 will run parallel to the existing Nord Stream pipeline and double the capacity for gas shipped directly from Russia to Germany to 110 billion cubic meters.

U.S. officials worry that the pipeline will weaken Ukraine’s geopolitical leverage in its struggle with Russia and allow Moscow to dictate political terms across the continent. German and Russian officials have countered that it is a commercial venture advancing energy security for Europe.

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