The Swiss-based company behind the $11bn Nord Stream 2 gas pipeline project from Russia to Germany has filed for bankruptcy and terminated contracts with all employees, Swiss radio broadcaster SRF reported.
Nord Stream 2 AG, which is owned by Russian state-owned gas giant Gazprom, was slapped by US sanctions last week after Russia recognised two breakaway regions in eastern Ukraine before it invaded the country.
Reportedly, the Zug-headquartered firm has been working with a financial adviser to clear some of its debt ahead of a US sanction deadline for other companies to stop doing business with it. The US Treasury issued an executive order on February 23 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% or greater interest by March 2.
Gazprom paid around $5.5bn for the construction of the Nord Stream 2 pipeline, with the remainder financed by Shell, OMV, Engie and Germany’s Uniper and Wintershall DEA. Since Russia’s invasion of Ukraine, several energy majors have said they would exit their Russian operations, including Shell, which said it would no longer be involved in Nord Stream 2.
The 1,230 km long pipeline was completed last year, but it had not commenced operations due to pending certification in Germany, which last week put this process on hold as a result of the escalating Ukraine crisis. Last month, German Chancellor Olaf Scholz announced plans to accelerate work to build two LNG terminals in the country to help reduce dependence on Russian gas imports.