Russian energy minister Alexander Novak on July 20 described a US bill introduced by senator John Barasso, Republican-Wyoming, that would impose mandatory sanctions against the Nord Stream 2 pipeline as absurd, according to the Platts.
«I have not seen this bill, we need to study it from a legal point of view, but based on what the media has written about it, this is, in my opinion an absurd bill that offsets all market rules,» Novak told journalists, Prime reported.
Speculation is growing about the fate of the Nord Stream 2 project, which would double Nord Stream's capacity and allow for shipments of up to 110 Bcm/year of Russian gas. The project has divided opinion in Europe, with some including the European Commission and many countries in Eastern Europe opposing the project on the grounds that it will increase Europe's dependence on Russian gas.
It has not been blocked yet, however, and 5 European companies continue to invest in it. Of the $11.3 billion estimated cost of Nord Stream 2, European partners Shell, Uniper, Wintershall, OMV and Engie signed up to cover 50% through a long term contract.
Almost half of this has already been provided, which leaves $2.8 billion, or 10% of Gazprom's 2018 capex program at risk of sanctions, analysts at VTB Capital said in a research note this week.
US officials have also criticized the project, but in recent weeks conflicting messages from US President Donald Trump have led to a lack of clarity about his stance on sanctions and broader cooperation with Russia. In response US congressional leaders are pushing legislation to strengthen sanctions against the Russian energy sector, with other bills likely to follow Barasso's.
Meanwhile, Russian officials have called for closer cooperation. During Trump's 1st major summit with Vladimir Putin at the beginning of last week, Putin said Russia and the US may work to together to regulate international markets to avoid price volatility.
On July 19, A.Novak said the 2 countries could cooperate more on energy issues, suggesting they revive the Russia-US energy dialog that has not been in operation for several years to discuss key energy issues.
«The USA is a gas exporter and this is one of the most interesting topics - how to interact on gas markets, considering that these markets are still local. There are separate Asian, European and American markets. Here it would be nice, as we do in the framework of the Gas Exporting Countries Forum, to cooperate with other exporters, for example the USA,» Novak said.
