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I UNDERSTAND
English Section

German builder Bilfinger quits Russian-led gas pipeline project: report

20.01.2021 15:00
German construction and engineering firm Bilfinger has withdrawn from work to build the disputed Nord Stream 2 gas pipeline from Russia to Germany amid the threat of new US sanctions, a Polish website has reported, citing German tabloid Bild.
The headquarters of industrial services company Bilfinger in Mannheim, Germany.
The headquarters of industrial services company Bilfinger in Mannheim, Germany.Photo: PAP/Uwe Anspach/dpa

Bilfinger had been contracted to develop, deliver and operate process control and safety systems for the pipeline as well as supply a gas-fired heating system for the project, the energetyka24.com website reported.

According to the Reuters news agency, Bilfinger has recently notified the United States as well as Nord Stream 2 AG, a subsidiary of Russia’s Gazprom, about its decision, driven by concerns over looming US sanctions targeting companies associated with the project.

The news comes as the United States has moved to slap sanctions on a Russian vessel helping build the Nord Stream 2 pipeline, according to energetyka24.com.

The Russian pipe-laying ship Fortuna arrives in the German port of Wismar earlier this month. The Russian pipe-laying ship Fortuna arrives in the German port of Wismar earlier this month. Photo: PAP/Jens Büttner/dpa-Zentralbild/dpa

The sanctions were expected to go into effect on Tuesday as part of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

Meanwhile, a spokesman for the US embassy in Berlin told Handelsblatt that Washington would continue to take “all necessary and appropriate steps” to prevent Nord Stream 2, according to Reuters.

Spooked by sanctions

Bilfinger would be yet another company this month to pull out of Nord Stream 2, after Zurich Insurance Group AG, Norway’s Det Norske Veritas Holding AS and Danish engineering firm Ramboll, amid the prospect of a fresh round of US sanctions seeking to penalize companies that provide technical certification and insurance for the controversial project, according to the Bloomberg news agency.

The United States last month urged European allies and private firms to halt work that could help build Nord Stream 2 as it readied new sanctions on the project, according to a report.

The Reuters news agency reported at the end of December that the outgoing administration of President Donald Trump was preparing a fresh round of congressionally mandated sanctions.

The news agency cited Trump administration officials as saying that the move could deal a fatal blow to the Nord Stream 2 project, which is 90 percent complete and led by Russian state gas giant Gazprom.

"We've been getting body blow on body blow to this, and now we're in the process of driving a stake through the project['s] heart," one US official said at the time, as quoted by Reuters, while speaking on the condition of anonymity.

The news agency reported that Russia in December resumed work to build the EUR 9.5 billion (USD 11.6 billion) pipeline after a one-year pause due to previous US sanctions.

'Russian malign influence project'

A US State Department official said earlier last month that the United States would continue to use sanctions as a tool against Nord Stream 2, according to a report at the time by energetyka24.com.

“Our sanctions and authorities are working and we will stop this pipeline” from being completed, Christopher Robinson, a deputy assistant secretary in the US State Department’s Europe and Eurasia bureau, said at a virtual conference on December 16.

“Our message is clear that for those who are aiding and abetting this Russian malign influence project, they must get out now or face the consequences,” Robinson told the online conference, which was held by the Atlantic Council, a Washington-based think tank.

During the same conference, US Republican Senator Ted Cruz said he believed that new American sanctions would prevent the completion of the Russia-Germany gas link even as Moscow scrambled to finish the undersea project, energetyka24.com reported last month.

Cruz added that US sanctions targeted "critical vulnerabilities without which the pipeline cannot be completed."

The US Congress in December passed the National Defense Authorization Act (NDAA), which included legislation sanctioning any companies that provide upgrading services for vessels working on the Nord Stream 2 pipeline or that provide insurance and certification services for the project, Radio Free Europe/Radio Liberty reported.

In October, the United States targeted companies “providing services or facilities for upgrades or installation of equipment” for vessels participating in the construction of Nord Stream 2 and companies funding those upgrades and installations.

'New hybrid weapon'

Nord Stream 2, designed to double the capacity of the existing Nord Stream undersea gas pipeline, is expected to send around 55 billion cubic meters of Russian natural gas a year directly to Germany under the Baltic Sea while bypassing the Baltic states, Poland and Ukraine.

US Secretary of State Mike Pompeo said in a media interview in September that the United States was working to build a coalition of countries to stop the Nord Stream 2 gas pipeline from being completed in Europe.

Speaking out on the pipeline in 2019, US President Donald Trump said: “We’re protecting Germany from Russia and Russia is getting billions and billions of dollars from Germany.”

Poland’s minister for European affairs, Konrad Szymański, warned in an opinion piece in September last year that Nord Stream 2, if completed, would make Europe economically dependent on Russia.

Polish Prime Minister Mateusz Morawiecki said in August that the Nord Stream 2 pipeline would allow Russia to buy weapons with European money.

Morawiecki has previously called Nord Stream 2 “a new hybrid weapon” aimed at the European Union and NATO.

US President-elect Joe Biden has been critical of Nord Stream 2 in the past and is unlikely to compromise on the contested project after taking office on Wednesday, according to some Polish experts.

(gs/pk)

Source: energetyka24.com, Reuters