Nord Stream 2 gas pipe EU investors cry foul over US sanctions

Diane Pallardy


LONDON (ICIS)–German utility Uniper and Austrian OMV expressed growing concerns regarding Washington’s intensifying efforts to stop Russia’s Nord Stream 2 pipeline from completion.

Uniper and OMV account for 20% of the pipeline’s €9.5bn financing, with French Engie, German Wintershall and Dutch Shell covering 10% each and Russia’s Gazprom the remaining 50%.

Uniper said in its H1 results that new US sanctions would increase the probability of the project not being completed.

As a result, the company would be forced to giving up on the income due from its investment.

Meanwhile, OMV CEO Rainer Seele sees “a big risk” that the sanctions may affect Europe’s attractiveness for investors.

Once finished, Nord Stream 2 would double Russia’s direct pipeline export capacity to the EU via this route to 110 billion cubic meters (bcm)/year.

This is roughly half of what Russia sent to Europe in the past two years and intends to keep sending until 2030. Europe is Russia’s main export market. Around 35% of the gas in the EU comes from Russia, the bloc’s top supplier.


The project failure risk continues to qualify as a major individual risk for Uniper, the company said on Tuesday.

With the US intensifying their efforts on targeted sanctions against the project the probability of a delay or even non-completion of the pipeline is increasing, Uniper said.

“In case the project can ultimately not be completed Uniper may have to impair the loan provided to Nord Stream 2 and forfeits the planned interest income,” the company added. This means if Nord Stream 2 is not finished, Uniper is unlikely to see the planned interests for the €950million loan that it provided for the project’s realisation.

OMV echoed these concerns.

Seele said that OMV has always complied with any existing sanctions and will continue to take any existing sanctions into account.

He added, however, that a European company should be able to expect politicians to ensure its investment is secure in Europe.

“If we are going to invest billions into a project that abides by all the rules and regulations here in Europe, we really need to ask ourselves whether we want any influence from any third country let this be called into doubt so to what extent can investors be convinced to invest here in Europe,” Seele said.

This indicates that if US sanctions made Nord Stream 2’s completion impossible, Europe could be a less attractive destination for investors.


The first US sanctions passed last December forced the project’s main pipelayers to withdraw leaving a 160km stretch unfinished.

Additional sanctions recently voted in by the US Senate would target all pipelaying activities, those providing services and equipment to any pipelayers involved in the project and the transmission system operator in charge of certifying the pipe is ready for operation.

The US Senate is yet to negotiate its proposed new sanctions with the House of Representatives, likely when both chambers are back from the summer break.

Besides these sanctions targeting the pipeline, the US implemented sanctions targeting Russia in August 2017. The scope of this 2017 sanctions legislation excluded direct investors enhancing Russia’s ability to build export pipelines before 2 August 2017.

But in mid-July, the US state department withdrew this key cut-off date , exposing Nord Stream 2’s five EU investors to potential sanctions.

The five investors signed the loan agreement on 24 April 2017, before the sanction act’s initial cut-off date. But they sent the committed funds gradually including after 2 August 2017.


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