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Biden administration designates Russian ship as helping to build Nord Stream 2 pipeline

[February 20, 2021] By Timothy Gardner and Patricia Zengerle

WASHINGTON (Reuters) - The Biden administration on Friday identified a Russian ship and a company it believes are helping to build the Nord Stream 2 pipeline, but the entities had already been sanctioned by the Trump administration and the project's opponents in Congress said the move would do little to halt work on it.

The State Department said in a report to Congress that the Russian ship, the Fortuna, and its owner, KVT-RUS, had been designated, a process that starts new sanctions, two lawmakers said.

Both entities had been sanctioned by former President Donald Trump on his last full day in office last month for helping to build the natural gas pipeline to bring Russian gas to Europe via Germany.

"Simply put, today's sanctions designations are wholly inadequate," Representative Michael McCaul, the top Republican on the House of Representatives Foreign Affairs Committee, said in a statement. "Allowing this pipeline to be completed would be nothing short of a victory" for Russian President Vladimir Putin, he said.

The pipeline is more than 90% complete and Russia's state energy company, Gazprom, and its Western partners are hoping to finish it this year. Much of the remaining work is difficult and in deep waters off Denmark.

The previous two U.S. presidents, Republican Trump and Democrat Barack Obama, had opposed the project as it would bypass Ukraine, through which Russia has sent gas to Europe for decades. That could deprive Ukraine of lucrative transit fees and potentially undermine its struggle against Russian aggression.

The United States has also been offering Europe exports of liquefied natural gas as an alternative to pipelined gas from Russia. In past winters Russia has shut gas deliveries to Ukraine and other countries during pricing disputes.

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The pipe-laying vessel Fortuna, which may be used to complete the construction of the Nord Stream 2 Baltic Sea gas pipeline, makes its way to Wismar, Germany, September 30, 2020. REUTERS/Oliver Denzer

President Joe Biden believes the pipeline is a "bad deal" for Europe, White House press secretary Jen Psaki has said. But Biden, a Democrat, also wants to renew relations with Europe early in his presidency and been under pressure from Germany, which needs Russian gas as it weans itself off nuclear and coal plants.

U.S. sanctions halted work on the pipeline last year after Allseas, a Western pipelaying company, dropped out.

McCaul and three other U.S. representatives including Democrat Marcy Kaptur, asked Secretary of State Antony Blinken this week to share plans on potential sanctions. In a letter to Blinken they listed 15 other ships they said were possibly engaged in pipe-laying or related activities that would be sanctionable under the defense policy law. Those ships included the Russian-flagged Akademik Cherskiy and the Umka.

Senator Jim Risch, the top Republican on the Senate Foreign Relations Committee, said the State Department report also identified 18 companies that ended their work on the project after U.S. consultation with allies. Risch said that consultation occurred during the Trump administration.

"This report fails to clarify what additional steps the Biden administration has taken to fully implement the law and end this project," Risch said. "I welcome the opportunity to work with the administration to rectify today's mistake and return to sound implementation of bipartisan sanctions."

(Reporting by Timothy Gardner and Patricia Zengerle; Editing by Leslie Adler)

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