US sanctions on the operator of Nord Stream 2 natural gas pipeline risk shutting off the cover from European insurers for the $11-billion project to ship Russian gas directly to Germany. This year, AXA, Zurich, and reinsurer Munich Re pulled out of providing insurance to the project’s construction as they were worried over new sanctions from Washington. Analysts said without insurance covers, the pipeline operator would find it harder to secure loans. The operator could also be exposed to costs for damage and delays or litigation.
The Swiss-based consortium that operates the pipeline said the project is covered by appropriate insurances. Analysts also said that the operator could work with Russian insurers in the absence of European entities. Russia’s RNCB Insurance has already been sanctioned. However, they also warned that the chance of further US sanctions had increased since Russia deployed more troops on Ukrainian borders.
