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Ukraine 'gravely alarmed' at Nord Stream 2 sanctions waiver as US Senators up ante

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Ukraine 'gravely alarmed' at Nord Stream 2 sanctions waiver as US Senators up ante


Ukraine gas officials, MPs call for pipeline to be halted

Biden administration waived sanctions on Nord Stream 2 AG

US senators look to reimpose waived sanctions in POWERS act

  • Author
  • Stuart Elliott
  • Editor
  • Alisdair Bowles
  • Commodity
  • Natural Gas
  • Topic
  • US Policy

Dozens of Ukrainian gas industry officials and lawmakers have called for work on the Nord Stream 2 gas pipeline to be halted in an open letter following the decision by the US government to waive sanctions against the pipeline's developer.

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In an open letter May 20, the officials said they were "gravely alarmed" by the decision to waive the application of sanctions on Nord Stream 2 AG, saying it was the "wrong signal" to send after Ukraine had just faced a major military buildup on its border.

It comes as a number of US Senators look to introduce new legislation that would re-impose the waived sanctions in a bid to halt the project.

The much-anticipated report from the State Department into Nord Stream 2 sanctions designations published May 19 included measures against Switzerland-based Nord Stream 2 AG and its CEO Matthias Warnig, but it was decided to grant a Presidential waiver to both the developer and Warnig.

The State Department said that applying those sanctions would "negatively impact US relations with Germany, the EU, and other European allies and partners."

However, in the open letter, Ukrainian officials -- including Yuiry Vitrenko, the head of state-owned gas company Naftogaz Ukrayiny, and Sergiy Makogon, the head of state-owned gas grid operator GTSOU -- said Nord Stream 2 was a "major geostrategic threat" to Ukraine and Europe.

"We call on stakeholders in Washington, Berlin, and Brussels in a position of authority and responsibility to apply all means necessary to stop this project," they wrote.

"It is time for Berlin to take a firm position against Nord Stream 2 and work with its US and European allies to ensure that pipelaying activity in the Baltic Sea ceases," they wrote.

"This diversionary pipeline threatens European unity, contradicts the climate goals, and subverts the EU's common energy policy. Thus, its completion can't be permitted."

They went on to say that to stop Nord Stream 2, the US did not need to adopt new measures.

"It must simply apply its existing, mandatory sanctions, which Congress passed with overwhelming bipartisan majorities as part of this year's and last year's National Defense Authorization Acts (NDAAs)," they wrote.

New US legislation

The letter came as Republican Senator Kevin Cramer said May 20 he was leading the Protecting Our Well-being by Expanding Russian Sanctions (POWERS) Act, legislation to build on recently-passed bipartisan sanctions against Russia.

The move would aim to "reinstate sanctions the Biden Administration is waiving on Russian people and entities involved in the construction of the Nord Stream 2 pipeline."

"The pipeline must be stopped, and I urge my colleagues to join this effort before the [Biden] Administration makes the US learn the hard way why energy security means national security," Cramer said.

If enacted, the POWERS Act would reinstate any sanctions against the company managing the project as well as its corporate officers whose sanctions were waived by the Biden Administration.

Joining Senator Cramer as co-sponsors were 13 other Senators. One of them, Republican Senator Roger Marshall, said: "The Biden Administration clearing the way for the completion of the Nord Stream 2 pipeline is a strategic blunder that harms the US and bolsters Russia's influence in the region and globally."

Russia has said it expects the pipeline to be completed this summer, with less than 100 km out of its total 2,460 km length estimated to be left to lay. It has insisted that it is a purely economic project.

The next report to Congress is due only in mid-August, meaning that the pipeline could be close to completion at that time.

If completed, it will allow for up to 55 Bcm/year of Russian gas to flow directly to Germany to add to the existing 55 Bcm/year capacity Nord Stream pipeline.