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U.S. Warns Companies to Abandon Work on Nord Stream 2 Pipeline as Biden Reportedly Weighs Sanctions

Andrey Rudakov | Bloomberg | Getty Images
  • U.S. Secretary of State Antony Blinken has warned all companies participating in the Nord Stream 2 pipeline to halt work immediately.
  • The Biden administration is reportedly considering new sanctions against entities involved in the pipeline, which would bring gas directly from Russia to Germany.
  • Washington is concerned the project will make Western Europe more energy dependent on Russia.

U.S. Secretary of State Antony Blinken on Thursday warned entities participating in the completion of a controversial Russian-German gas pipeline, known as Nord Stream 2, to stop work on the project immediately as President Joe Biden reportedly weighs new sanctions.

Blinken said the Biden administration is committed to the sanctions legislation Congress passed in 2019 and is tracking entities that appear involved in completing the pipeline.

"The Department reiterates its warning that any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline," Blinken said.

According to a Bloomberg report, the Biden administration is reviewing additional sanctions against entities involved. The sanctions could target an insurance company working with companies laying pipeline and other companies providing vessels and material to the project, according to the report.

The pipeline, which is nearly complete, poses geopolitical and security questions that have divided American allies in Europe. The U.S. is concerned Russia is trying to undermine Ukraine's role as a gas conduit into Western Europe by building a pipeline under the Baltic Sea directly to Germany, making Berlin more energy dependent in the process.

The pipeline is a major point of contention between the U.S. and Germany, a crucial American ally. Berlin has resisted pressure from Washington to pull its support for the project.

Blinken, during recent testimony in front of the House Foreign Affairs Committee, said the Nord Stream 2 pipeline violates the European Union's own energy security principles and jeopardizes the security of Ukraine and Poland.

The Trump administration imposed sanctions on a Russian pipe-laying ship involved in the project a day before President Donald Trump left office. The Biden administration has expressed its opposition to the project previously, but it is unclear how hard of a line it will take.

Russia's Gazprom owns Nord Stream 2 AG, the company tasked with the planning, construction and operation of the pipeline. The project has received financing from Germany's Uniper and Wintershall Dea, France's Engie, Austria's OMV and the Netherlands' Shell.

- CNBC's Holly Ellyat contributed to this report.

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