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Top U.S. diplomat warns Germany companies building Nord Stream 2 pipeline could face sanctions

CNBC logo CNBC 3/24/2021 Amanda Macias
  • Secretary of State Antony Blinken said Wednesday that the Nord Stream 2 pipeline stretching from Russia to Germany poses a security threat to Europe.
  • The pipeline, which is approximately 95% completed, is a major sticking point for the Biden administration and crucial NATO ally, Germany.
  • Berlin has resisted pressure from Washington to pull its support for the project.
Tony Blinken wearing a suit and tie: U.S. Secretary of State Antony Blinken gives a press briefing at the end of a NATO Foreign Ministers' meeting at the Alliance's headquarters in Brussels, Belgium, March 24, 2021. © Provided by CNBC U.S. Secretary of State Antony Blinken gives a press briefing at the end of a NATO Foreign Ministers' meeting at the Alliance's headquarters in Brussels, Belgium, March 24, 2021.

WASHINGTON – Secretary of State Antony Blinken warned Germany on Wednesday that companies building the Nord Stream 2 gas pipeline could face sanctions, as Washington tries to pressure Berlin to pull its support for the controversial Russian-backed energy project.

Blinken, during a press conference at NATO headquarters, said he made clear to German Foreign Minister Heiko Maas that President Joe Biden opposes the project, which would pipe gas directly from Russia to Germany under the Baltic Sea, bypassing U.S. and EU ally Ukraine.

The secretary said he wanted to make sure during his conversation with Maas that there was "no ambiguity" in the U.S. position on the pipeline.

"The pipeline divides Europe, it exposes Ukraine and Central Europe to Russian manipulation and coercion and it goes against Europe's own stated energy security goals," Blinken said.

"President Biden has been very clear for a long time in his view that Nord Stream 2 is a bad idea and I reiterated that view directly to [German] Foreign Minister Heiko Maas and I also made clear that firms engaged in pipeline construction risk U.S. sanctions," Blinken added.

Read more: The Nord Stream 2 dilemma: Why a trans-Atlantic dispute is likely to go from very bad to even worse

The U.S. is concerned the pipeline project will undermine Ukraine's security and economy, which relies on transporting gas, while making Western Europe more dependent on Russian energy.

Berlin has resisted pressure from Washington to pull its support for the project.

a large ship in a body of water: In this aerial view the Castoro 10 pipelay vessel lays concrete-coated pipe for the Nord Stream 2 gas pipeline onto the seabed of the Baltic Sea on August 16, 2018 near Lubmin, Germany. © Provided by CNBC In this aerial view the Castoro 10 pipelay vessel lays concrete-coated pipe for the Nord Stream 2 gas pipeline onto the seabed of the Baltic Sea on August 16, 2018 near Lubmin, Germany.

Last week, Blinken called on firms participating in Nord Stream 2 to quit the project or risk sanctions.

"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," the nation's top diplomat said.

The Trump administration imposed sanctions on a Russian pipe-laying ship, but it has been unclear how hard a line the Biden administration 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.

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