U.S. to unveil Nord Stream 2 pipeline report, but sanctions may take time: sources

WASHINGTON (Reuters) – The Biden government is expected to name the companies it believes will help build Russia’s Nord Stream 2 pipeline as early as Friday, according to five sources. This could ultimately lead to sanctions for the almost completed project.

The State Department’s report to Congress, which may come out on Friday, is expected to list companies the government believes will help complete the natural gas pipeline, which, according to Russian state-owned energy company Gazprom, is more than 90% complete.

The sanctions law, which went into effect Jan. 1, would require the administration to sanction named companies, but President Joe Biden could use a consultation period with allies to delay the introduction of measures that would quickly stall the project, four of the said Swell. including three congressional assistants and someone who works in industry.

President Joe Biden believes the pipeline is “bad business” for Europe, spokeswoman Jen Psaki said, and many US lawmakers are pushing for sanctions. But Biden was also under pressure to allow the project from Germany, which urgently wants Russian gas, as it is weaned itself from nuclear and coal-fired power plants.

Biden is expected to comment on Friday at a virtual meeting of the Munich Security Forum.

The White House had no immediate comment.

The pipeline would bypass Ukraine, through which Russia has been sending gas to Europe for decades, deprive it of lucrative transit fees and potentially undermine its fight against Russian aggression.

Both Republican and Democratic lawmakers want sanctions on the project, which became even more politicized after the Kremlin critic Alexei Navalny, poisoned in Siberia, was jailed by Russia this month. Some of the legislators also come from states that produce gas that could be sold to Europe from Russia as an alternative to pipeline fuel.

According to Gazprom, the project with Western partners to route Russian gas under the Baltic Sea to European customers will be completed this year. But it still requires difficult pipe laying in deep waters off Denmark.

The governments of former Presidents Barack Obama and Donald Trump rejected Nord Stream 2, believing it would increase the political and economic influence of Russian President Vladimir Putin on Europe.

The consultation clause in the Sanctions Act, which went into effect Jan. 1, allows a U.S. president to consult allies for an unspecified period of time before sanctions are imposed.

“There is great concern that they will use the Hill and its allies’ consultation to postpone heavy sanctions,” said a Senate adviser.

The Biden administration was in close consultation with Congress on the report, said an additional administrative source that did not confirm the timing of the report.

The idea of ​​collaboration between the State Department and lawmakers opposing the project has been denied by Congress sources. A Senate adviser said it was “grossly misleading”.

In recent weeks, Democratic and Republican lawmakers opposing the pipeline from both the House and Senate have urged the government to impose sanctions on companies involved in its construction.

Reporting by Timothy Gardner; Additional coverage by Humeyra Pamuk and Andrea Shalal; Adaptation by Tom Hogue