Nord Stream 2 AG, the operator of the controversial Russian gas pipeline under the Baltic Sea from Russia to Germany, said this week it could not confirm reports that it has filed for bankruptcy amid a raft of international sanctions against Russian assets, according to a Bloomberg report.
Nord Stream 2 AG is owned by Zug, Switzerland-based Gazprom International Projects LLC, a subsidiary of Russia’s state-run gas producer Gazprom PJSC.
In a statement, cited by Bloomberg, Nord Stream 2 AG said it had “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.”
The U.S. imposed tougher penalties on Nord Stream AG and its corporate leadership last week.
Following Russia’s invasion of Ukraine, Germany suspended its certification of the pipeline (GM Feb. 25, p. 1), which was completed in December following delays due to earlier sanctions on insurers and vessels involved in building the project. According to Germany’s Vice Chancellor Robert Habeck speaking on Feb. 24, as cited by Bloomberg, the pipeline is unlikely to start “in the medium term.”
German regulator Bundesnetzagentur halted the certification process in November, after requesting the Nord Stream holding company to re-organize its legal structure to conform with German Law (GM Nov. 19, 2021).
Austrian oil and gas company OMV AG, which owns a 75 percent stake in polyolefins and fertilizers major Borealis AG, said on March 1 it will review its involvement in the Nord Stream 2 pipeline.
OMV also reported its Executive Board has decided not to further pursue negotiations with Gazprom on the potential acquisition of a 24.98 percent interest in the Achimov 4A/5A phase development in Russia’s Urengoy gas and condensate field, and to terminate the Basic Sale Agreement of Oct. 3, 2018.
The oil and gas company’s move increases speculation that OMV and Borealis may pull the plug on negotiations with EuroChem Group AG for the acquisition of Borealis’ nitrogen business, which includes fertilizer, melamine, and technical nitrogen products. Zug, Switzerland-based EuroChem is controlled by Russian billionaire Andrey Melnichenko.
Late last week, Upper Austria’s Economy Minister Markus Achleitner said Borealis should “reconsider” talks with EuroChem on selling its fertilizer business (GM Feb. 4, p. 1) after Russia’s invasion of Ukraine, the minister told Linz, Austria-based newspaper Oberoesterreichische Nachrichten, according to a Bloomberg report (GM Feb. 25, p. 31).
“In the light of these terrible acts, everything is up for review. That is why this merger needs to be questioned,” Achleitner is cited as saying.
EuroChem began exclusive negotiations to acquire Borealis’ nitrogen business after submitting a binding offer in early February. The offer valued Borealis’ nitrogen business on an enterprise value basis at €455 million (approximately $505 million at current exchange rates).