The Swiss-based company which built the Nord Stream 2 gas pipeline from Russia to Germany is considering filing for insolvency, two sources familiar with the situation said, as it attempts to settle claims ahead of a U.S. sanction deadline for other entities to stop dealings with it, APA reports citing Reuters.
The United States sanctioned Nord Stream 2 AG last week after Russia recognised two breakaway regions in eastern Ukraine prior to its invasion of the country, which has prompted a wave of economic sanctions by the West.
Nord Stream 2 AG, which is registered in Switzerland and owned by Russian state-owned gas giant Gazprom , last year completed the $11 billion project which was designed to double the capacity to pump gas from Russia to Germany.
The 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 adviser on clearing some of its liabilities and could formally begin insolvency proceedings in a Swiss court as soon as this week.
Nord Stream 2 AG did not respond to requests for comment from Reuters. Gazprom declined to comment.
The 1,230 km (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.
The U.S. Treasury Department's Office of Foreign Assets Control issued an executive order on Feb. 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 percent or greater interest" by March 2.