Nord Stream 2 AG, which built Nord Stream 2—an underground gas pipeline connecting Russia to Germany—is considering filing for insolvency as it aims to settle claims ahead of the sanctions deadline set by the United States (US) to stop other entities from dealing with it.
The US sanctioned the company last week after Russian President Vladimir Putin signed a decree officially recognising two eastern Ukrainian separatist regions—Luhansk and Donetsk—as independent republics. On February 23, the US Treasury Department’s Office of Foreign Assets Control released an executive order authorising “the wind-down of transactions involving Nord Stream 2 AG or any entity in which Nord Stream 2 AG owns, directly or indirectly, a 50 per cent or greater interest by March 2.”
The company has reportedly been working with financial advisors to clear liabilities before it files for insolvency in a Swiss court. When contacted by Reuters, both Nord Stream 2 AG and Gazprom remained unavailable for comment.
Furthermore, the company has also terminated contracts with employees. In an interview with Swiss radio service RTS, Switzerland’s President and Economy Minister, Guy Parmelin, confirmed that approximately 140 Nord Stream 2 employees have been fired.
In an email to Reuters, Nord Stream 2 AG wrote, “Following the recent geopolitical development leading to the imposition of US sanctions on Nord Stream 2 AG, the company had to terminate contracts with employees. We very much regret this development.”
In contrast, the official website of Nord Stream 2 displays the following message: “We cannot confirm the media reports that Nord Stream 2 has filed for bankruptcy. The company only informed the local authorities that the company had to terminate contracts with employees following the recent geopolitical developments leading to the imposition of US sanctions on the company.”
“We can confirm that we have taken down this website due to serious and continuous attacks from outside. Unfortunately, our mobile and fixed network lines are also not reachable – at least for the time being,” the message adds.
Swiss-based Russian gas pipeline operator Nord Stream 2 AG has not filed for insolvency, the company said on Wednesday in an email statement, according to Reuters, refuting the media reports published earlier this week. pic.twitter.com/7hiEXZBXtW
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The future course of Gazprom and Nord Stream 2 AG remains unclear. The Switzerland-based company, owned by Russian state-owned gas giant Gazprom, was constituted to oversee the construction and operation of an $11 billion underwater gas pipeline. Gazprom financed half the cost of the pipeline, and the other half was taken care of by British oil and gas giant Shell, Austria’s OMV, France’s Engie, and Germany’s Uniper and Wintershall DEA. Following the Russian invasion of Ukraine, the Austrian company said it would review its involvement in the pipeline.
The pipeline would have doubled Russia’s capacity to export gas to Germany. Completed last year, the pipeline has not begun operations as the German regulators have temporarily suspended its license, citing non-compliance with the law. Additionally, German Chancellor Olaf Scholz suspended the certification of the pipeline last week amid Russia’s continuing aggression against Ukraine.