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US waives sanctions against Nord Stream 2 developers


Pipeline about 95% complete and could be finished in summer

Would be key source of gas to Germany, Eastern Europe

US remains opposed to pipeline despite appeasing Germany

  • Author
  • Jordan Blum    Stuart Elliott
  • Editor
  • Shashwat Pradhan
  • Commodity
  • Natural Gas

Houston — The US has waived sanctions against Russian natural gas giant Gazprom for its ownership of the nearly completed Nord Stream 2 gas pipeline to Germany, and against its CEO, according to a State Department report to the Congress on May 19.

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The presidential waiver decision weakens the Biden administration's opposition against the Nord Stream 2 pipeline in order to appease some of the US' Western allies, especially Germany, even as the pipeline is seen as giving Russia a greater geopolitical advantage in Europe and over Ukraine.

"Today's actions demonstrate the administration's commitment to energy security in Europe, consistent with the president's pledge to rebuild relationships with our allies and partners in Europe," Secretary of State Antony Blinken said in a statement.

"We will continue to oppose the completion of this project, which would weaken European energy security and that of Ukraine and Eastern flank NATO and EU countries. Our opposition to the Nord Stream 2 pipeline is unwavering."

US President Joe Biden entered the White House with the pipeline already nearly finished, leaving him with the decision of upsetting Germany or giving a win to Russian President Vladimir Putin. He is choosing to side with a strong European ally after relationships with the EU were frayed during the Trump administration.

The decision coincided with Blinken meeting his Russian counterpart Sergey Lavrov on May 19 at an Arctic Council summit in Iceland.

Republicans were quick to blast the decision, and some Democrats were upset with the move as well.

"The Nord Stream 2 pipeline is a Russian trap that the Biden administration is willingly walking into," said Sen. John Barrasso, R-Wyoming, and the ranking Republican on the Energy and Natural Resources Committee.

"We know Russia uses energy as a geopolitical weapon to threaten our friends and allies. The Biden administration is allowing the Nord Stream 2 pipeline to be added to Russia's arsenal."

Earlier in the day, German foreign minister Heiko Maas called the anticipated decision a "constructive" step in relations between Washington and Berlin. President Biden's report was due May 19 on which entities involved in Nord Stream 2 should be designated as sanctionable under US law. Some of the vessels and other entities involved in the construction will remain subject to sanctions.

"This is a constructive step and we will continue dialogue with our partners in Washington," Maas said.

German Chancellor Angela Merkel acknowledged in early May that the US and Germany continued to have differing views over the project.

Germany has in the past criticized US extra-territorial sanctions against Nord Stream 2, and continues to defend it, saying it would bring more gas supply security to Germany.

However, Annalena Baerbock, the leader of the German Green Party, which is currently doing well in polls ahead of the next German parliamentary election in September, said this week she would not allow Nord Stream 2 to be finalized.

The pipeline remains incomplete after the threat of US sanctions prompted Switzerland-based Allseas to halt work in December 2019.

Currently two Russian vessels are operating in Danish waters -- the Fortuna and the Akademik Cherskiy -- to lay the remaining kilometers of the pipeline, estimated at less than 100 km.