President Joe Biden said on Wednesday the United States would impose sanctions on the company in charge of building Russia’s Nord Stream 2 gas pipeline, expanding penalties on Moscow after it recognized two breakaway regions in eastern Ukraine.

The sanctions, which target the Nord Stream 2 AG company and its corporate officers, add to pressure on the Baltic Sea project that was designed to double the gas flow capacity from Russia to Germany.

The White House said the sanctions will not affect Gerhard Schroeder, a former German chancellor and a close friend of Putin’s who has headed the shareholders committee of Nord Stream since 2005.

Europe’s most divisive energy project, Nord Stream 2 has not begun operations pending certification by Germany and the European Union.

Germany on Tuesday halted the pipeline, worth $11 billion, citing Russia’s actions toward Ukraine. The United States and the EU worry the pipeline will increase Europe’s dependence on Russian energy supplies and deny transit fees to Ukraine, host to another Russian gas pipeline.

Biden said in a statement his administration has been closely coordinating Nord Stream 2 action with Germany, adding: “Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers.”

Biden added: “These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine. As I have made clear, we will not hesitate to take further steps if Russia continues to escalate.”

Nord Stream 2 AG is a registered Swiss firm whose parent company is the Russian state-owned gas giant Gazprom . Gazprom owns the entire pipeline but paid half the costs, with the rest shared by Shell, Austria’s OMV (OMVV.VI), France’s Engie and Germany’s Uniper (UN01.DE) and Wintershall DEA [RIC:RIC:WINT.UL].

Reuters

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