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Russia gas pipeline hit with sanctions after Trump signs defense bill

A gas pipeline connecting Russia and Germany is being targeting with U.S. sanctions as part of a defense bill President Trump signed into law on Friday.

The $11 billion pipeline, being constructed in part by Swiss-Dutch company Allseas, is now in jeopardy following the sanctions measure included in the National Defense Authorization Act (NDAA).

“In anticipation of the enactment of the National Defense Authorization Act (NDAA), Allseas has suspended its Nord Stream 2 pipelay activities,” Allseas said in a statement dated Dec. 21.

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“Allseas will proceed, consistent with the legislation’s wind down provision and expect guidance comprising of the necessary regulatory, technical and environmental clarifications from the relevant US authority.”

The annual U.S. defense policy bill contained a provision, first sponsored by Sens. Ted Cruz (R-Texas) and Jeanne Shaheen (D-N.H.), that would impose levies on companies that lay pipe for the project.

The NDAA specifically calls for the Trump administration to identify companies working on the pipeline within 60 days that would then be targeted with sanctions.

The Trump administration, much like its predecessor, opposes the project over claims it would strengthen Russian President Vladimir Putin’s economic and political sway in Europe. Moscow in the past has cut fuel deliveries to Ukraine and parts of Europe in winter over pricing disputes.

“We have a degree of consistency, over a decade of opposing this issue, across presidential administrations,” one U.S. official told Reuters.

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The U.S., which has become the world’s top oil and gas producer, has sought to sell its products abroad as “freedom gas” to give European allies an alternative to Russian products. 

Germany on Saturday hit back at the possible sanctions, saying they’re “incomprehensible” as the country tries to cut back its reliance on coal and nuclear power.

“They hit German and European companies,” Ulrike Demmer, a spokeswoman for Chancellor Angela Merkel’s government, said in a statement to Bloomberg News.

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