Trump mulling sanctions over Russia’s gas pipeline


Fri, Jun 14, 2019 - Page 10

US President Donald Trump on Wednesday said that he was considering sanctions over Russia’s Nord Stream 2 natural gas pipeline project — which the US has told European companies to avoid — and warned Germany against being dependent on Russia for the fuel.

“We’re protecting Germany from Russia and Russia is getting billions and billions of dollars from Germany,” Trump told reporters at an appearance with Polish President Andrzej Duda at the White House.

Nord Stream 2, a 1,225km pipeline project to ship gas from Russia under the Baltic Sea to Germany, would double the capacity of the existing Nord Stream pipeline and has divided the EU.

Eastern European, Nordic and Baltic Sea countries see the pipeline as increasing Moscow’s economic grip on Europe. Yet many politicians and energy companies in Germany support Nord Stream 2, because the country, Europe’s biggest economy, needs steady gas supplies as it seeks to wean itself off of coal and nuclear power.

Nord Stream 2 is led by Russian state gas producer Gazprom, with 50 percent of the funding provided by Germany’s Uniper SE and BASF AG’s Wintershall unit, Anglo-Dutch firm Royal Dutch Shell PLC, Austria’s OMV AG and France’s Engie SA.

US Secretary of Energy Rick Perry last month said that a sanctions bill putting onerous restrictions on companies involved in the project would come in the “not too distant future.”

Perry has visited Europe to promote US exports of liquefied natural gas (LNG) to help it diversify its sources of natural gas beyond Russia, which has occasionally stopped shipments of gas via Ukraine during times of pricing disputes.

US LNG companies have made some long-term deals with European countries, but the shipments are also generally more expensive than gas sent by pipeline from Russia.

Earlier at the White House on Wednesday, Polish Oil and Gas Co signed a deal to purchase 1.5 million tonnes of LNG per year from US-based Venture Global LNG Inc starting in 2023, bringing its total planned purchases from the company to 3.5 million tonnes per year.

Sales outlined in the contract are worth about US$8 billion, Trump and the US Department of Energy said.

Poland receives most of its gas from Russia, but its long-term contract for gas supplies from Gazprom ends in 2022. Poland also signed an agreement with US officials on civilian nuclear power cooperation.