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U.S. Warns Russian-German Gas Pipeline Risks Triggering Sanctions

A landing station for the Baltic Sea pipeline Nord Stream 2 in Lubmin, Germany
A landing station for the Baltic Sea pipeline Nord Stream 2 in Lubmin, Germany

A senior U.S. diplomat is warning that a planned gas pipeline from Russia to Germany through the Baltic Sea raises security concerns and risks triggering U.S. sanctions.

U.S. Deputy Assistant Secretary Sandra Oudkirk, an energy policy expert at the State Department, said on a visit to Berlin on May 17 that the United States opposes the Nord Stream 2 gas pipeline and could impose sanctions on it because of its potential to increase Russia's "malign influence" in Europe.

"We are exerting as much persuasive power as we possibly can" to stop the project through diplomatic means first, she said, but she noted that Congress has given the government authority to impose sanctions on such Russian pipeline projects if necessary.

"Any pipeline project -- and there are many multiple pipeline projects in the world that are potentially covered by this sanctions authority -- is in an elevated position of sanctions risk," she said. "We would be delighted if the project did not take place."

Her comments came one day before German Chancellor Angela Merkel is due to meet with Russian President Vladimir Putin in the Russian resort of Sochi. The two are expected to discuss the pipeline project as well as the U.S. decision to withdraw from the Iran nuclear deal.

Despite taking a hard line against Russia in recent years over its aggression in Ukraine and other matters, Merkel has defended the pipeline project, saying Germany badly needs to secure its gas supplies.

With Europe's largest economy, Germany is the world's largest importer of natural gas and it is planning to increase reliance on gas to generate power as it phases out its nuclear power plants.

The German government's point man for Russia, Dirk Wiese, said that at a time of strong disagreements between Russia and the West over Ukraine and other matters, Berlin views the pipeline and the Iran deal as "islands of cooperation" with Moscow.

The $11 billion project would double the amount of natural gas Russia can funnel to Western Europe from newly tapped reserves in Siberia. It is due to go online at the end of next year.

Russia's Gazprom, Royal Dutch Shell, and other Western firms involved in building the pipeline started preparatory work off Germany's Baltic coast this week, and German factories are already churning out thousands of steel pipes to use in the undersea network.

Oudkirk said the project raises security concerns because it would divert gas flows away from Ukraine, which depends heavily on transit fees, and could become a pathway for Russia to install high-tech monitoring and listening equipment in the Baltic Sea, a sensitive military region.

"The new project would permit new technologies to be placed along the pipeline route, and that is a threat," she said.

Oudkirk noted that Russia in the past has turned off gas supplies to Ukraine during disputes and said Washington is concerned that the Baltic pipeline might create similar "vulnerabilities" by giving Russia similar leverage over Western European nations and increasing their dependence on Russian gas.

Oudkirk rejected suggestions that Washington opposes the pipeline because it wants to increase U.S. liquefied natural gas exports to Europe.

Jens Mueller, a spokesman for Nord Stream 2, dismissed concern that the new pipeline would create more dependence on Russian gas, saying it would be only one of many sources of natural gas for Western Europe.

"This pipeline can't be used to blackmail or negatively affect any country," he said.

German officials have acknowledged a need to consider the interests of Ukraine.

Merkel sent her economy minister, Peter Altmaier, to Moscow and Kyiv this week to try to secure a deal that would keep some gas flowing through Ukraine, which currently earns up to 2 billion euros a year from transit fees.

Altmaier has said he is optimistic that a "substantial" amount of gas will continue to flow through Ukraine when the Baltic pipeline starts operating.

With reporting by AP and Reuters