Iran-Linked Ship to Aid Construction of Contested Russian Pipeline

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December 29, 2020

A ship linked to the Iranian regime’s illicit activities is currently being repurposed to engage in work on a contested Russian-German gas pipeline that has been heavily sanctioned by bipartisan coalitions in Washington, D.C., and is broadly opposed across Europe.

The U.S. government has information indicating Russia may attempt to acquire and modify the Oceanic 5000, a crane ship based in Spain’s Canary Islands, for work on the contested Nord Stream 2 pipeline, according to current and former U.S. officials working on the issue. The Oceanic 5000 is known to U.S. officials for helping the Iranian regime build gas pipelines in the Persian Gulf. A senior Trump administration official confirmed the ship’s ties to Iran, as well as a recent report by Reuters noting Russia’s interest in acquiring it for work on Nord Stream 2.

The new revelations promise to deepen consternation in Washington with Berlin and Moscow’s efforts to complete the Nord Stream 2 pipeline. Construction on the project resumed earlier this month after being stalled since December 2019, when President Donald Trump approved sanctions spearheaded by Senators Ted Cruz (R., Texas) and Jeanne Shaheen (D., N.H.). With its final weeks in office, the Trump administration is preparing a new salvo of sanctions on the Nord Stream 2 project to stymie its completion.

The pipeline remains one of the biggest flashpoints between the United States and Russia, which views the project as crucial to its control of Europe’s natural gas market. America and its allies, primarily Ukraine, see the pipeline as part of a bid by the Kremlin to wrench control of Europe’s energy sources from more Western-oriented countries. As work on the pipeline resumes, the Trump administration is waging a diplomatic push to dissuade European companies from partnering with Moscow on the project.

The Oceanic 5000’s suspected role in the multibillion-dollar pipeline has raised red flags with U.S. officials and regional experts who see Russia employing the same sanctions-busting tactics routinely used by the Iranian regime. The ship was owned by the Tehran-based Pars Oil and Gas Company, which has been subject to U.S. sanctions, and laid a pipeline in the Persian Gulf in 2017, according to information about the ship provided to the Washington Free Beacon.

"From Iran to Russia, the Oceanic 5000 has clearly found a niche in trying to circumvent U.S. sanctions to the benefit of America's adversaries," said Daniel Vajdich, former lead staffer for Europe and Eurasia on the Senate Foreign Relations Committee. Vajdich now leads Yorktown Solutions, which advises Ukraine’s oil and gas industry in opposition to the pipeline.

The vessel is currently owned by Spain’s Amos Del Oceano and managed by the United Arab Emirates-based MC Ship Management, both of which could be exposing themselves to U.S. sanctions if the ship is transferred to Russia for work on Nord Stream 2.

As part of sanctions passed by Congress in last year’s massive defense spending bill, companies aiding Russia’s construction of the pipeline could be subject to American sanctions.

"Any company involved in upgrading the Oceanic 5000 to work on Nord Stream 2 would also be immediately sanctioned," Vajdich said.

In response to questions about how sanctions might be applied, a State Department official said the United States will not preview any action.

Outgoing secretary of state Mike Pompeo told Athens News Agency in September that Europe should "not ... be dependent on Russia and Gazprom," the country’s state-controlled energy giant.

Opposition to the pipeline has garnered rare bipartisan support in Congress. Incoming president Joe Biden has referred to the project as a "bad deal for Europe" and is expected to maintain U.S. sanctions on it.

A separate round of congressional sanctions spearheaded by Cruz and Shaheen are expected to become law in the coming days as part of a defense authorization bill passed just before the end of the year.

U.S. officials maintain that sanctions on the pipeline have made it difficult for legitimate companies to engage with Russia as it scrambles to finish construction.

"American sanctions have made Nord Stream 2 completely toxic. It’s poison for the reputation of any ship that’s involved, even if they don't get sanctioned, which they will," said one veteran GOP foreign policy official tracking the matter. "So of course, the Germans and Russians are desperately turning to ships that are already toxic for working with the Iranian regime. No one expects any different. The question is why anyone else would ever want to be associated with that project or those ships."

Published under: Iran , Russia , Sanctions