WASHINGTON—The State Department cited the parent company and chief executive of a Russian natural-gas pipeline for sanctions but waived the penalties, clearing a hurdle for the completion of a project that U.S. officials say will increase Moscow’s influence in Europe.
In a report released Wednesday, the State Department named Nord Stream 2 AG, the Swiss-registered Russian firm behind the project, as well as its chief executive officer, Matthias Warnig, as having knowingly engaged in sanctionable activity but waived the application of these sanctions on national-security grounds.
Nord Stream 2 has rankled a bipartisan majority on Capitol Hill and tested U.S. relations with Germany, a chief customer for the pipeline. U.S. lawmakers and some officials worry that Nord Stream 2 will strengthen Russia’s grip on the European energy market and weaken U.S. partner Ukraine, which hosts a gas-transit network and is trying to resist Russian aggression.
With less than roughly 10% of construction remaining through Danish and German waters in the Baltic Sea, the 764-mile pipeline now has a clearer path to completion with the sanctions waived.
Officials at Nord Stream 2 AG didn’t respond to a request for comment.