Nord Stream 2 pipeline not moving forward ‘at this point in time,’ White House says

9:57 pm Tuesday, February 22nd, 2022

WASHINGTON (Reuters) – The White House said on Tuesday the development of Nord Stream 2 is “not moving forward at this point in time” after steps by Germany to halt the Baltic Sea gas pipeline project.

White House spokesperson Jen Psaki declined to say whether Germany’s decision was reversible.

Germany on Tuesday halted the undersea pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognized two breakaway regions in eastern Ukraine.

Europe’s most divisive energy project, worth $11 billion, was finished in September, but has not begun operations pending certification by Germany and the European Union.

Psaki’s comment during a White House news briefing raised concerns among U.S. lawmakers and other critics that the project would be resurrected.

The pipeline was aimed at diversifying energy supplies for Europe, but ran into opposition from Washington and within the European Union amid concerns that it would increase Europe’s dependence on Russian energy supplies and could deny transit fees to Ukraine, host to another Russian gas pipeline.

Republican Senator Ted Cruz said the U.S. sanctions were “a step in the right direction,” but insisted they needed to be paired with U.S. sanctions on the companies involved in the pipeline, which the Biden administration has waived thus far.

James Treanor, special counsel and sanctions expert at the Cadwalader law firm, said that Germany’s halting of the pipeline came as a relief to many on both sides of the Atlantic, but that the project could still proceed at a later stage.

“What Germany has done is essentially put that issue on ice. But certainly the German action is subject to review and could be revisited later on,” he said.

Nazak Nikakhtar, a former senior U.S. Commerce Department official and partner with the Wiley law firm, said Psaki’s comment about the pipeline was most likely intended to leave a “possibility to adjust and pivot,” if needed.

“You always have to leave yourself wiggle room,” she said.

(Reporting by Steve Holland, Trevor Hunnicutt and Andrea Shalal; Editing by Chris Reese and Gerry Doyle)