Nord Stream 2 Terminates Worker Contracts Amid Sanctions

(Bloomberg) -- Swiss-based Nord Stream 2 AG, the builder of the controversial Russian gas pipeline to Europe, terminated contracts with its employees following international pressure on Russia after its invasion of Ukraine.

“Following the recent geopolitical developments leading to the imposition of U.S. sanctions on Nord Stream 2 AG, the company had to terminate contracts with employees,” the company said in an emailed statement. “We very much regret this development.”

The statement comes as countries across the world are breaking their economic ties with Russia over the invasion. Sanctions imposed by the U.S., the U.K., the European Union and their allies already have limited Russia's ability to import key western technologies, tap foreign debt markets and access much of its $640 billion of reserves.

The Nord Stream 2 pipeline under the Baltic Sea was completed in December, following delays amid less-restrictive U.S. sanctions on insurers and vessels involved in building the link. It only needed permission from the German regulator to start pumping as much as 55 billion cubic meters of Russian gas per year to Europe.

Russia's Gazprom PJSC is the sole owner of the link, though five EU energy companies -- Wintershall Dea AG, OMV AG, Shell Plc, Engie SA and Uniper SE -- provided loans to finance the $11 billion project. All of the Nord Stream 2 shares were pledged “until a full settlement of the secured obligations.”

The Russian producer declined to comment.

As part of the mounting pressure on Russia, the U.S. imposed tougher penalties on the Nord Stream 2 AG and its corporate leadership last week.

The EU didn't impose its own sanctions on the project, but German Chancellor Olaf Scholz asked the Economy Ministry to withdraw its assessment that the project didn't pose a threat to security of supply. The positive assessment was a necessary part of the project's certification and start of operations.