Zurich Insurance Group will drop out of Russia’s Nord Stream 2 project in the face of looming US sanctions against European companies that support construction of the $11 billion gas pipeline, two sources familiar with the situation said.
The US State Department this month told companies which it suspects are helping to build the pipeline that they face a risk of sanctions as the outgoing Trump administration prepares a final round of punitive measures against the project, Reuters reported this week.
Zurich, which has a big US business, is one of around 20 insurers in a consortium backing the project, one person familiar with the situation said.
The Swiss insurer declined to comment on Saturday on specific customers, but said: “Zurich has a comprehensive compliance framework in place and is committed to fully comply with any applicable sanctions regulations.”
The Nord Stream 2 consortium said on Friday that preparatory work to complete the subsea gas pipeline to Germany in Danish waters can go ahead, pointing to the latest notifications by the Danish Maritime Authority.
Denmark’s Nautiskinformation notified shippers on Thursday that prohibited areas near Bornholm would be established beginning on Friday for the pipe laying vessel Fortuna, assisted by construction and supply vessels.
Construction of Nord Stream 2 was initially halted in December 2019 following a sanctions threat from the United States, which wants to cut Europe’s dependence on Russian energy and sell its own liquefied natural gas to the region.
Nord Stream 2, led by state energy company Gazprom , is designed to double capacity of the existing undersea Nord Stream gas pipeline from Russia to Germany to 110 billion cubic metres per year, more than half of Russia’s overall pipeline gas exports to Europe.