US pressure drives 18 European companies away from Nord Stream 2

The port of Mukran in Sassnitz, Mecklenburg-Western Pomerania. Nord Stream 2 is being built from here [EPA-EFE | Clemens Bilan]

The US government is confident its sanctions against the Nord Stream 2 gas pipeline connecting Russia and Germany will have an impact. In a document obtained by EURACTIV Germany, the State Department lists 18 European companies that have already ended their cooperation with the project. EURACTIV Germany reports.

The document is a progress report on sanctions, and must be submitted to Congress as a matter of protocol.

So far, only one US sanction has come into effect and it did not impact any of the 18 companies directly. Instead, it targeted the Russian pipe-laying vessel ‘Fortuna’ and the operating company, KVT-RUS.

But looking at the days when the companies terminated their contracts, one can see the connection: 16 of the 18 companies ended their activities just days after the sanctions were imposed. This suggests that they feared that they would soon be affected themselves.

The US government has exerted direct pressure on some of the companies, a spokesperson for the German Eastern Business Association told EURACTIV Germany, explaining that the US embassies had contacted the companies directly.

That can also be gleaned from the report. In the case of one of the two companies, which will terminate their Nord Stream contracts in February, there had already been talks at the end of January, suggesting “good will,” as the State Department put it.

EU says it does not need Nord Stream 2, but only Germany can block it

The European Union does not need the Nord Stream 2 pipeline for its energy security but any decision to stop the project carrying Russian natural gas to Germany would have to come from Berlin, a senior European Commission official said on Tuesday (23 February).

German companies: Hardly any comment

Two German companies are also on the list:.

One of them, Bilfinger, supplied process control and monitoring technology to the pipeline, for €15 million. Contacted by EURACTIV, a spokeswoman confirmed that the activities had ceased, but added that “the work has been completed.”

The other German company, the insurance company München Re, confirmed that the contractual relationship had been terminated.

Both companies declined to comment on why they had ended their contracts.

US sees progress against Nord Stream 2 amid calls for more action

The United States said Monday (22 February) it had seen progress from European companies moving out of the Nord Stream 2 pipeline from Russia to Germany, but critics urged stronger action.

The report is not perceived as a threat among European companies. On the contrary, sources from business circles told EURACTIV that the report should rather be seen as an offer to talk.

The Nord Stream sanctions came into force during Donald Trump’s presidency. Among other things, Trump had an economic interest in selling US gas to Europe. The listing of the ship ‘Fortuna’ was one of the last official acts of the Trump administration.

New US President Joe Biden is also sceptical of the pipeline, calling it a “bad deal” for Europe. However, he has not threatened any new sanctions so far, and the tone of the report is friendly. New sanctions would first have to be agreed with EU countries, and current consultations with allies are “ongoing and robust.”

Biden is positioning himself as a trustworthy ally of Europe. He already advertised this during the election campaign, and most recently during last week’s Munich Security Conference: “America is back.”

Against this backdrop, the wording in the report suggests that Washington will refrain from further unilateral sanctions against Nord Stream 2 for the time being, according to business sources. A certain consideration for European companies can be seen, and opponents of the pipeline are not satisfied with the report.

Hit Putin where it hurts, Navalny's associates say

The EU should target Russian President Vladimir Putin’s close circle of people and ‘hit him where it hurts’, two close associates of imprisoned Kremlin critic Alexey Navalny said on Monday (22 February). They also warned of the increasing influence of corrupted Russian money in Europe.

“No need for this pipeline”

Civil society groups have again called for the project to be stopped completely. “There are more than enough reasons to stop Nord Stream 2 now,” said Sonja Meister of the environmental NGO Urgewalt.

“There is no need for this pipeline, as Germany’s gas demand will decrease in the future. All companies involved, including Wintershall, Uniper and OMV, should divest themselves of this climate-damaging investment ruin right now,” she added.

Following the arrest of Russian opposition figure Alexei Navalny, opposition parties – Greens and the liberal FDP – have called for a construction freeze (at least temporary, in the case of the FDP) in order to harm Russian President Vladimir Putin economically. Yet, the German government wants to press ahead with the construction.

[Edited by Zoran Radosavljevic]

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