Biden sanctioning company behind Nord Stream 2 pipeline in Russia

The energy pipeline has complicated efforts at diplomacy

US President Joe Biden plans to sanction the company behind the Nord Stream 2 energy pipeline connecting Russia and Europe, according to multiple reports.

The $11bn pipeline, owned by Russia’s state-run oil company Gazprom, would double the flow of gas into Germany if it becomes operational, representing a significant source of revenue for the Russian government.

Nord Stream 2 was finished in September, but the 750-mile project hasn’t come online, pending approval from Germany and the European Union.

The German government had long insisted the project was merely a commercial one, and last year President Biden overruled Congress on harshly sanctioning the pipeline, citing concerns about the US relationship with Germany.

That changed as the situation on the ground in Ukraine escalated.

After an intensive diplomatic effort by the US, the German government announced on Tuesday it was halting the certification of Nord Stream 2, a major blow to the project.

“The situation today is fundamentally different,” German chancellor Olaf Scholz told reporters on Tuesday. “That’s why, in view of the latest developments, we also have to reassess this situation. By the way, that includes Nord Stream 2.”

Blocking the pipeline “sacrifices what would have been a cash cow Russia’s coffers” and “will relieve Russia’s chokehold over Europe through its supply of gas,” US deputy National Economic Council director Daleep Singh told reporters on Tuesday.

The move is the culmination of years of pressure from members of Congress, who passed a bipartisan round of sanctions in 2019, and an expanded set of penalties in 2020.

The following year, Mr Biden waived the most direct sanctions, against the Nord Stream 2 pipeline’s parent company and its CEO, on national security grounds, earning him condemnation from top Republicans, who held up dozens of national security nominees in response.

The GOP has long criticised Mr Biden’s handling of Nord Stream 2. For example, former Trump administration White House press secretary Kayleigh McEnany wrote in a recent Facebook post, “President Trump sanctioned Russia. President Biden gave them a pipeline.”

Whether such sanctions have their desired impact remains to be seen, as signs points to continued Russian aggression in Ukraine.

Russia forces are now on the ground in parts of separatist eastern Ukraine, which Russia has recognised as independent territory.

"According to the information at my disposal, Putin is moving additional forces and tanks into the occupied Donbas territories," Latvian Prime Minister Arturs Krišjānis Kariņš told CNN’s Jim Sciutto on Wednesday. "By any definition, that’s a crossing of a sovereign territory into a neighboring country."

Russian officials have alternatively derided attempts to target the project, and insisted that Nord Stream 2 should be above politics.

“Well then,” Dmitri Medvedev, vice chairman of the Russian security council, wrote on Twitter. “Welcome to the new world in which Europeans will soon pay 2,000 euro per 1,000 cubic meters of gas,” which is about double the current rate.

A spokesperson for Russian president Vladimir Putin, meanwhile, said he regretted these attempts and highlighted the “mutual benefit” of the project.

“This is a purely economical, commercial project which, on top of mutual benefit, is meant to be a stabilizing factor for European gas market,” the spokesperson said.

The new sanctions would build on measures imposed by the Biden administration on Tuesday to limit business dealings in two areas of eastern Ukraine that Russian President Vladimir Putin has declared “independent”.