Baker Hughes and AXA Group and 16 other companies recently quit work on Russia’s Nord Stream 2 natural gas pipeline and will not be sanctioned, according to a document the Biden administration sent to Congress last week which was seen by Reuters.
The project has become a political hot potato, with the US and other EU countries insisting it is not needed and strengthens Russia’s leverage over Germany and other countries in the region, and Russia believing that despite the headwinds, including US sanctions, the project is necessary and will be completed.
Norwegian verification service DNV GL exited the project last month in response to a possible widening of US sanctions.
The $11-billion pipeline, operated by Russia's Gazprom, would double the capacity of its existing export line and would bypass Ukraine through which Russia has sent gas to Europe for decades. That could deprive Ukraine and other countries of transit fees.
As the world’s top gas producer, the US also has an economic interest in seeing the plug pulled on Nord Stream 2. It would result in a more favorable market in Europe to export liquefied natural gas as an alternative to Russian gas.
The US State Department told Congress recently it had designated the Russian ship Fortuna and its owner, KVT-RUS, for helping to build Nord Stream 2 under sanctions law that took effect this year. But the two had already been sanctioned by the Trump administration under previous law, and opponents of the project in Congress said sanctioning them again would not stop the pipeline, said Reuters.
Nord Stream 2 is a 764-mile natural gas pipeline that originates near Narva Bay in the Kingisepp district of Russia’s Leningrad region and terminates at the northern German coastal town of Lubmin, near Greifswald. The original Nord Stream pipeline was placed in service in 2011.