U.S. Close to Imposing Sanctions Against EU Companies over Nord Stream 2

U.S. President Donald Trump’s administration is on the verge of imposing sanctions against several European companies that are part of Russia’s Nord Stream 2 pipeline project, Foreign Policy reported citing sources familiar with the issue.

If built, the politically contentious underwater pipeline, planned by Russia’s state-owned giant Gazprom and a consortium of major energy companies from EU countries, would bring Russian gas directly to Germany and Gazprom’s European customers, circumventing Ukraine, Poland, and the Baltic countries. The U.S. has been opposing the project, arguing it would increase Russia’s energy grip on Europe.

According to the Foreign Policy report, key figures in the Trump administration now view sanctions as an increasingly likely option for blocking the project.

A source from the State Department said that “we have been clear that firms working in the Russian energy export pipeline sector are engaging in a line of business that carries sanctions risk.”

Another source pointed to the stance taken by U.S. National Security Advisor John Bolton and other senior U.S. officials who perceive the Nord Stream 2 project as “a threat to the United States and European security” and are poised to halt it.

“Everything is on the table. … The [Trump] administration is taking a whole of government approach to stopping the Nord Stream project,” the source pointed out.

Successive U.S. administrations opposed the pipeline since it was first announced in 2015, fearing it would undercut Ukraine in its lucrative middle-man position for energy flows between Russia and Europe. Congress passed a bill last summer making sanctions possible.

Many Central and Eastern European countries also oppose the project, which they fear will tighten Moscow’s energy stranglehold on Europe by doubling the amount of natural gas that flows directly from Russia to Germany.

The State Department would not respond directly to the matter but said companies working on the project were doing so at their own peril.

“We have been clear that firms working in the Russian energy export pipeline sector are engaging in a line of business that carries sanctions risk,” a State Department spokeswoman said.