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Shell at risk of U.S. sanctions over participation in Nord Stream 2

By Timothy Gardner and Humeyra Pamuk

WASHINGTON (Reuters) – U.S. Secretary of State Mike Pompeo on Wednesday warned investors in two Russian natural gas pipeline projects that they could face sanctions as the Trump administration seeks to curb the Kremlin’s economic leverage over Europe and Turkey.

Pompeo told a news conference that European investors in the Nordstream 2 and a branch of the Turkstream pipelines could be “put at risk” of U.S. sanctions under the Countering America’s Adversaries Through Sanctions Act of 2017. The pipelines will carry gas from Russia to Europe and Turkey.

“It’s a clear warning to companies aiding and abetting Russia’s malign influence projects will not be tolerated. Get out now, or risk, the consequences,” Pompeo said.

The United States, which has a glut of natural gas, is trying to export liquefied natural gas to Europe.

Russia’s foreign ministry spokeswoman Maria Zakharova said sanctions on the two pipelines equated to political pressure, TASS news agency reported.

“This is the use of political pressure for unfair competition,” Zakharova said. “It is an indicator of the weakness of the American system. Apart from forceful methods, there are no effective tools.”

Nord Stream 2 suspended construction last December after Swiss-Dutch company Allseas, which specializes in subsea construction, pulled out following U.S. President Donald Trump’s signing of a defense policy bill that contained other sanctions on the project.

Two Russian-owned pipe-laying vessels may finish the remaining 100 miles (160 km) of the project, led by Russia state-run company Gazprom. Gazprom is financing half of the project worth about 9.5 billion euros ($10.5 billion).

Last month a bipartisan group of U.S. senators led by Jeanne Shaheen, a Democrat, and Ted Cruz, a Republican, introduced a sanctions bill on Nord Stream 2, that they say would stop the project by expanding existing sanctions to include penalties on parties providing underwriting services, insurance or reinsurance and pipe-laying activities.

Nord Stream 2 aims to double the Nord Stream route’s existing capacity.

Other partners in Nord Stream 2 are Austria’s OMV, the German firms Uniper and Wintershall, Anglo-Dutch energy major Royal Dutch Shell Plc and France’s Engie.

(Reporting by Timothy Gardner, Jonathan Landay and Humeyra Pamuk in Washington and Alexander Marrow in Moscow; Editing by Marguerita Choy and Lisa Shumkaer)


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