Investor Presentaiton
What's Newest (cont'd)
Most recent Nord Stream 2 ("NS2") gas export pipeline sanctions developments
No new sanctions in the fresh April 2021 sanctions packet
Biden Admin continues trying to navigate between desire for solidarity with close ally Germany and congressional press
(see report) to block NS2 completion
The new 15 April EO does include a provision authorizing sanctions against any Russian person/entity involved in "cutting or
disrupting gas or energy supplies to Europe, the Caucasus, or Asia" - which could be meant as fresh warning to Gazprom
(and perhaps an attempt to mollify congressional anti-NS2 hawks)
OFAC's 19 Jan. 2021 SDN designation of the Fortuna (one of the primary vessels involved in NS2 pipelaying
in the Baltic Sea) and its Russian owner co. KVT-Rus - and then their designation again in late Feb. 2021
(under both PEESA, and CAATSA section 232 - see slides 10, 55, 63-65)
related late Feb. PEESCA-mandated Biden Admin. report to Congress - emphasized / named the several companies known
to have stopped participation the project because of sanctions (including a number of global insurers)
late Feb. / early March loan funding suspension announcements by two of the five European energy company participants
in NS2 - but with the project co. assuring that there is already full funding to complete the work
some US Congress pressure on Biden Admin. for further sanctions (including 3 March Senators' letter to President Biden
and 5 March House of Reps. letter to Secretary Blinken naming several primary and support vessels (mostly Russia-
registered) other than Fortuna - including the long-publicized Admiral Cherskiy - also involved in the NS2 pipelaying)
continuing spectrum of NS2 views in EU - incl. some renewed opposition in reaction to the Navalny events, and also some
hardening German gov't support per perceived need for more Russian gas to help wean economy from nuclear and coal
Apparent resumption of Russian vessels' pipelaying work as of early 2021, and most recent Russian
pronouncements that all will be finished before end 2021
Recent continuing speculation and reports on German gov't / Biden Admin. possibly willing and working
toward compromise that would allow NS2 to be completed without further sanctions
in return for agreement on reliable mechanism to shut it down in event Russia reduces gas flow through Ukraine below
agreed level in future (and some possible further deal element)
the still-effective termination / sunset provision in the original PEESA/NDAA 2020 would allow for such a deal (see slide 64)
Morgan Lewis
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