Senate panel backs Nord Stream 2 pipeline sanctions bill

WASHINGTON (Reuters) – A U.S. Senate committee passed a bill on Wednesday to slap sanctions on companies and individuals involved in building the Nord Stream 2 pipeline from Russia to Germany that the Trump administration says would strengthen Moscow’s economic grip on Europe.

A view shows the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019. REUTERS/Anton Vaganov

The Senate Foreign Relations Committee passed the “Protecting Europe’s Energy Security Act,” by a vote of 20 to 2. The bill, which reflects some lawmakers’ concerns over Russian influence in Europe, would still need to pass the full Senate and House of Representatives and be signed by President Donald Trump into law.

“Russia has a history of using energy as a weapon,” said Republican Senator Ted Cruz, one of the measure’s sponsors, as he urged committee members to back the bill.

The Nord Stream 2 project, which has mostly been completed, is led by the Russian state-owned gas company Gazprom, with half of the funding provided by Germany’s Uniper and BASF’s Wintershall unit, Anglo-Dutch firm Shell, Austria’s OMV and France’s Engie.

The sanctions could also affect other natural gas export pipelines from Russia, including the Turk Stream project.

Cruz’s bill is one of a handful in Congress looking to impose sanctions on the project. The measure would penalize ships that lay Russian energy export pipelines at depths of 100 feet (30 meters) or more below sea level, a stipulation that means it could also be applied to the Turk Stream gas pipeline.

Republican Senator Jim Risch, the chairman of the panel, said the committee would also consider another bill – the bipartisan Defending American Security from Kremlin Aggression Act – although the timing of that was not clear.

That bill, known as DASKA, would impose stiff sanctions on Russia over its meddling in U.S. elections and aggression against Ukraine. One of its sponsors, Republican Senator Lindsey Graham has called it the “sanctions bill from hell.”

DASKA would impose strict measures on Russia’s oil and gas sector, which makes up about 40 percent of Moscow’s revenues, including sanctioning individuals who provide goods, services or financing to support the development of crude oil in the country.

Russian state-owned energy ventures outside of Russia, including investments in liquefied natural gas projects, would also face sanctions.

Republican Senator Rand Paul was one of two votes against the bill on Wednesday, along with Democratic Senator Tom Udall.

Paul faulted the bill for sanctioning U.S. allies and harming international companies that employ thousands of Americans, which was disputed by the bill’s backers.

“It makes no sense to hurt people that are helping us apply pressure on Russia and in other areas,” Paul said.

A companion bill passed the House Foreign Affairs Committee last month.

Reporting by Timothy Gardner and Patricia Zengerle; editing by Susan Thomas, Bill Berkrot and G Crosse

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