MAJOR PROJECTS INVOLVING EUROPEAN AND RUSSIAN COMPANIES

Major Projects

1. Baltic Liquiefied Natural Gas (Shell and Gazprom);
2. Blue Stream (Eni and Gazprom);
3. CPC Pipeline (Shell, ENI and Rosneft);
4. Nord Stream 1 (Wintershall, E-On Ruhrgas, NV Nederlandse Gasunie, Engie and Gazprom);
5. Nord Stream 2 (Engie, OMV Aktiengesellschaft, Shell, Uniper, Wintershall and Gazprom);
6. Shakhalin 2 expansion (Shell and Gazprom);
7. Shah Deniz and South Caucasus Pipeline (BP and Lukoil);
8. Zhor Field (BP, ENI and Rosneft).

Companies

1. BP (UK)
2. Engie (France)
3. ENI (Italy)
4. E-On Ruhrgas (Germany)
5. Gazprom (Russian)
6. Lukoil (Russian)
7. NV Nederlandse Gasunie (Netherlands)
8. OMV Aktiengesellschaft (Austria)
9. Rosneft (Russian)
10. Shell (UK/Netherlands
11. Wintershall (Germany)

US Russian Sanctions

1. Europeans are upset principally about language authorizing the President to impose sanctions on firms involved in building energy export pipelines (Nord Stream 2) and an article requiring sanctions to be levied on firms participating in certain oil projects in Russia.
2. They see such provisions as extraterritorial outreach by the United States that could impact their economic interests and business ties.
3. The Europeans also see this tougher US stance on Moscow as undermining the carefully calibrated joint US-EU approach to sanctions fashioned after Russia’s annexation of Crimea in 2014 and support for separatists in eastern Ukraine.
4. The language in the legislation has been modified from earlier versions, in part to address European concerns. The section on pipelines instructs the president to take any measures 'in ‘coordination with allies of the United States’ and other provisions of primary interest to Europe allow the president to waive imposing sanctions on European companies involved in Nord Stream 2. The language in the law regarding pipelines only says the president “may” impose sanctions, not “shall” impose them, and even without such a provision in the law the president has the legal authority at any time to decide that Russian energy pipelines pose a national security risk, issue an Executive Order to that effect and sanction those involved. So, while mention of Nord Stream 2 in the law can be seen as more “in your face” than diplomatic demarches, it does not make sanctions any more likely than before.
5. Implementing regulations will be written now that the legislation has been signed into law and they will provide another opportunity to address European concerns.
6. EU concerns about tougher US penalties on Russia are understandable, in part because it complicates the delicate balance among EU Member States on their own Russian sanctions, but the US legislation is moving forward primarily due to US domestic political exigencies. The EU has been heard and there is a commitment on the part of the US not to allow this squabble to undermine the heretofore excellent US-EU cooperation on these issues.