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US threatens to sanction European firms helping Nord Stream 2 pipeline

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A worker puts a cap to a pipe at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia June 5, 2019. (Reuters photo)

The US State Department has warned European companies which it suspects are involved in building Russia’s Nord Stream 2 gas pipeline that they face the risk of sanctions, according to two sources.

“We are trying to inform companies of the risk and urge them to pull out before it’s too late,” Reuters quoted a US government source as saying on Tuesday.

Russia restarted construction of the politically-delicate pipeline to Germany in December after the construction work on the $11.6 billion pipeline, which will bypass Poland and Ukraine, was put on a halt for a year over Washington’s threat of sanctions.

The consortium -- led by Russian gas giant Gazprom -- has yet to lay more than 100 kilometers of pipeline, though more than 90 percent of the project has reportedly been completed.

The new warning comes as the outgoing administration of President Donald Trump prepares a final round of punitive measures against the project.

The Trump administration opposes the project saying it would increase Russia’s economic and political leverage over Europe. Moscow and Germany, however, say Nord Stream 2 is a commercial project.

Berlin says it needs gas as it shuts coal and nuclear plants over environmental and safety concerns.

It is uncertain whether President-elect Joe Biden, who opposed the project when he served as vice president under Barack Obama, would be willing to compromise on the project after he takes office on Jan. 20.

The US sources, who spoke on condition of anonymity, said the State Department is likely to issue a report by Thursday or Friday on firms it believes are helping the project.

The companies include those that provide insurance, help to lay the undersea pipeline, or verify the project’s construction equipment, the sources said.

Zurich Insurance Group, a Swiss insurance company, could be one of the companies, but it did not immediately respond to a request for comment.

Gazprom’s Western partners in the project include Germany’s Uniper, BASF’s Wintershall Dea, Anglo-Dutch oil major Shell, Austria’s OMV and Engie.

European firms, including German ones, have received the inquiries from the Trump administration since October about their activities pertaining to the project, said a US based industry source who has seen the State Department communications.

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