MercoPress. South Atlantic News Agency

Nord Stream 2 pipeline builder files for insolvency and leaves staff redundant

The pipeline, which runs under the Baltic Sea, was built to transport natural gas directly from Russia into Europe, according to the Nord Stream 2 website

The Swiss company that built the Nord Stream 2 pipeline, supposed to double the Russian gas supply to Germany, has filed for insolvency and left redundant all its staff, according to Swiss radio SRF. The US$ 11bn pipeline, which runs between Russia and Germany, was completed last September and waiting for final approval from German authorities, but was put on hold following the Russian invasion of Ukraine.

The company was targeted in U.S. sanctions by the Biden administration. An executive order issued by the U.S. Treasury Department's Office of Foreign Assets Control directed “the wind down of transactions involving Nord Stream 2 AG,” as well as “any entity in which Nord Stream 2 AG owns, directly or indirectly, a 50% or greater interest” by March 2.

Silvia Thalmann-Gut, who serves as the economic director of the Swiss canton of Zug, told SRF that the offices for Nord Stream 2 had been briefed on the move and that the employees had received their notices of termination and were being informed of their rights and obligations.

The pipeline, which runs under the Baltic Sea, was built to transport natural gas directly from Russia's reserves and into Europe, according to the Nord Stream 2 website. With the parallel, existing Nord Stream pipeline that has been operating since 2011, the two channels have the capacity to deliver more than a quarter of the gas demanded by Western Europe.

While some have touted the benefits of the pipeline, others have warned against the potential consequences of putting so much power in Russia's hands.

“Critics, including Washington, have warned it would give Moscow more sway over European countries and potentially widen political divisions over how to respond to Russian aggression,” the Council on Foreign Relations, an independent U.S. think tank, wrote in a recent blog.

Nord Stream 2 would have also made it possible for more of Russia's natural gas exports to Germany to bypass Ukraine and other nations involved in the transit. Concerns have mounted that Ukraine and these other countries, such as Poland, would miss out on billions of dollars worth of transit fees every year because of the pipeline, the post said.