The US Senate passed a bill to punish companies involved in building the Nord Stream 2 gas pipeline from Russia to Germany.
The sanctions are part of a U.S. defense bill and are aimed at pipeline construction companies based in Western Europe. The bill will be reviewed by President Donald Trump in the near future.
Jim Risch, a Republican senator and chairman of the Senate Foreign Relations Committee, said that sanctions would prevent the completion of the project and be an important tool to prevent Russia from increasing its influence and at the same time. protect the integrity of the European energy industry.
The sanctions require US Secretary of State Mike Pompeo to issue a 60-day report on vessels involved in laying undersea pipelines for Nord Stream 2 and TurkStream.
The companies listed in the report will be blacklisted by Washington, unless the US president determines that the company is reducing pipeline operations. The US president can also waive sanctions based on national security considerations.
German Foreign Minister Heiko Mass rejected US sanctions, saying it was "foreign interference", but worried that the measure could slow down the project.
However, Bloomberg quoted an unnamed source in the US government as saying the project was near completion and the sanctions were nearly ineffective, instead, the United States could impose costs on other energy projects of Russia.
Nord Stream 2 was built by Russian state corporation Gazprom. The project allows Russia to transport gas to Germany through the Baltic Sea without going through Ukraine or Poland, helping to double the amount of gas to Germany. US Senators said Ukraine could lose billions of dollars in transit fees if the project is completed.
The Trump administration, like its predecessor, is opposed to the project, arguing that it will increase Russia's political influence in Europe. Washington is said to have offered to export US liquefied natural gas, or LNG, to Europe to replace the Russian gas pipeline.
Nord Stream-2 is expected to start operation in mid 2020, while TurkStream, a gas pipeline project from Russia to Turkey, is expected to be operational by January 2020.
Another pipeline, called "Siberian Energy" that carries gas from the Russian Far East to China, began construction on December 2. All three projects are thought to have long-term political and economic benefits for Russia, helping the country penetrate two major markets, Europe and China.
Nord Stream 2 gas pipeline from Russia to Germany through the Baltic Sea. Graphics: Gazprom.