The Swiss-based company behind the US$11-billion Nord Stream 2 gas pipeline has declared bankruptcy and laid off all its staff, after Germany suspended final certification of the intensely controversial project in response to Russia’s invasion of Ukraine and the United States followed with economic sanctions.
The pipeline company, wholly owned by Russian state fossil Gazprom, filed for bankruptcy on Tuesday and dismissed all 106 of its staff, Euractiv reports.
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“Two sources, who spoke on condition of anonymity because the talks about a potential insolvency are confidential, said that Nord Stream 2 AG has been working with a financial advisor on clearing some of its liabilities and could formally begin insolvency proceedings in a Swiss court as soon as this week,” Reuters wrote Tuesday. Neither Nord Stream nor Gazprom would comment.
That day, Nord Stream said it “cannot confirm the media reports,” BNN Bloomberg wrote, adding that it “only informed the local authorities that the company had to terminate contracts with employees following the recent geopolitical developments leading to the imposition of U.S. sanctions on the company.”
But Silvia Thalmann-Gut, economics director for the Swiss canton of Zug, where Nord Stream is headquartered, told Swiss public broadcaster SRF that “Nord Stream fell insolvent as a result of last week’s U.S. sanctions.”
“The 1,230-kilometre (767-mile) pipeline had not begun commercial operations because it was pending certification in Germany, which last week put this process on hold as a result of the escalating Ukraine crisis,” Reuters says. “Gazprom paid half the cost of building Nord Stream 2, with the remainder of the $11-billion pipeline project financed by British oil and gas major Shell, Austria’s OMV, France’s Engie and Germany’s Uniper, and Wintershall DEA.”
Shell, Engie, and Wintershall declined comment for the Euractiv post, while Uniper said it had no information on a possible bankruptcy filing by Nord Stream. But the Times of London says Shell stands to lose up to $1 billion in the increasingly likely event that the pipeline is never allowed to start up.
