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U.S. warns German firms of possible sanctions over Russia pipeline

Reuters  |  BERLIN 

By Michael Nienaber

(Reuters) - The U.S. to has warned companies involved in the construction of the Russian-led 2 that they could face sanctions if they stick to the project, a said on Sunday.

U.S. has accused of being a "captive" of due to its reliance on Russian and urged it to halt work on the $11 billion

The pipeline, which would carry gas straight to under the Baltic Sea, is also seen critical by other European countries as it would deprive of which could make more vulnerable in the future.

U.S. addressed the issue in a letter sent to several companies, the said.

"The letter reminds that any company operating in the Russian export pipeline sector is in danger under CAATSA of U.S. sanctions," the embassy said, adding that other European states also opposed the planned pipeline.

Germany and other European allies accuse of using its Countering America's Adversaries Through Sanctions Act (CAATSA) to meddle in their foreign and policies due to its extraterritorial effect.

Russian is implementing the project jointly with its Western partners - Uniper, Wintershall, Engie, Austria's OMV and Anglo-Dutch group

The letter raised eyebrows within the A German said the ambassador's approach did not correspond to common diplomatic practice and that would address the issue in direct talks with officials in

An declined to comment while no immediate reaction was available from

Germany and have been at odds since annexed Crimea from in 2014. But they have a common interest in the 2 project, which is expected to double the capacity of the existing 1 route.

German newpaper Bild am Sonntag, which was first to report on the letter, said that Grenell was trying to blackmail German companies with the letter. The denied this.

"The only thing that could be considered blackmail in this situation would be the Kremlin having leverage over future gas supplies," the embassy said.

The letter was coordinated in by several agencies and "is not meant to be a threat but a clear message of U.S. policy", the spokesman added.

German said on Thursday that any U.S. sanctions against Nord Stream 2 would be the wrong way to solve the dispute and that questions of European had to be decided in Europe, not in the

(Additional reporting by and Tom Kaeckenhoff; Editing by Mark Heinrich)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sun, January 13 2019. 20:03 IST