US sanctions over Russian gas pipeline project hit Swiss firm

The the controversial Nord Stream 2 pipeline aims to link Germany with Russian gas. Keystone / Frank Hormann

United States President Donald Trump on Friday signed a law  that will impose sanctions against companies associated with the construction of Russia's Nord Stream 2 gas pipeline. Among them is Swiss firm Allseas which announced overnight that it was suspending work on the project.

Washington and its allies in Ukraine worry the construction project would increase the dependence of Europeans on Russian gas and thus strengthen the influence of Moscow. The European Union (EU) slammed US interference in its energy policy. “As a matter of principle, the European Union opposes the imposition of sanctions against European companies engaged in legal activities,” an EU spokesman said.

Moscow also condemned the decision. “A state with a public debt of 22,000 billion dollars forbids solvent countries to develop their real economy,” Russian foreign affairs spokeswoman Maria Zakharova said on her Facebook page. She denounced “the American ideology (which) does not support global competition.”

The sanctions aim to ground the Russian project to a halt. The pipeline is 80% complete and was due to come into service at the end of 2019. Crossing the Baltic Sea, it aims to double supplies of natural. gas from Russia to Germany, the main beneficiary of the project. Berlin has also objected to the US decision.

In an exchange on Friday with his German counterpart Heiko Maas, Secretary of State Mike Pompeo reiterated the “strong opposition” to the continued construction of Nord Stream 2. Russia, for its part, has already made it clear that it will carry out this project despite the sanctions announcement.

Sanctions include freezing assets and revoking U.S. visas for pipeline contractors. The U.S. State Department must now disclose within 60 days the names of the companies and individuals involved.

Allseas, a Swiss company based in Châtel-Saint-Denis in France, was among the companies targeted. The Swiss firm owns the world’s largest pipelay vessel, the Pioneering Spirit, which was hired by Russia’s Gazprom to build the offshore section. Allseas, which still had a section to complete of the gas pipeline in Danish waters, announced it was suspending work on the project.

The pipeline represents an investment of around ten billion euros, half of which is being financed by Gazprom and half by five European companies (OMV, Wintershall Dea, Engie, Uniper and Shell).