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Russian pipeline projects likely to go ahead despite sanctions, analysts say

|By: , SA News Editor

New U.S. sanctions will make it harder and more expensive for Russia to build the Nord Stream 2 and TurkStream gas export pipelines to Europe, but analysts say the two Gazprom-led (OTCPK:OGZPY) projects are unlikely to be stopped.

But the sanctions bill, which had the overwhelming support of the U.S. Congress before it was signed by Pres. Trump, throws into doubt the €4.75B pledged by European companies including Royal Dutch Shell (RDS.A, RDS.B), Engie (OTCPK:ENGIY) and OMV (OTCPK:OMVJF) to help fund Nord Stream 2 and could threaten other projects.

Analysts say Gazprom will need to take on additional costs itself, depend on Russian state banks or seek money at higher rates from Asian lenders, but it does not mean that Nord Stream 2 would not be built.

BP is playing down the impact of sanctions on its business, despite owning 20% of Rosneft (OTCPK:RNFTF) and being one of the industry’s biggest investors in Russia, with CEO Bob Dudley saying this week that the most problematic language for BP had been rewritten and the company expected to be able to “work very carefully within the sanctions.”

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