Nord Stream 2 Pipeline Owner Files for Bankruptcy, Releases Workforce

The company behind the Nord Stream 2 pipeline has reportedly filed for bankruptcy and is letting all of its employees go.

A Swiss official confirmed the development to Swiss radio broadcaster SRF Tuesday.

While the pipeline, which runs between Russia and Germany, was completed last September, Germany recently said that final approval for Nord Stream 2 had been put on hold because of Russia's actions in Ukraine. News that the company had filed for bankruptcy and fired all of its more than 100 employees emerged the day before the deadline set by the U.S. Treasury Department.

The Swiss-based company that built the pipeline was targeted in U.S. sanctions announced last week by the Biden administration. An executive order issued by the U.S. Treasury Department's Office of Foreign Assets Control directed "the wind down of transactions involving Nord Stream 2 AG," as well as "any entity in which Nord Stream 2 AG owns, directly or indirectly, a 50 percent or greater interest" by March 2.

Nord Stream 2
The company behind the Nord Stream 2 pipeline has reportedly filed for bankruptcy and is letting all of its employees go. Above, the receiving station of the Nord Stream 2 gas pipeline stands on February 2, 2022, near Lubmin, Germany. Sean Gallup/Getty Images

Silvia Thalmann-Gut, who serves as the economic director of the Swiss canton of Zug, told SRF that the offices for Nord Stream 2 had been briefed on the move and that the employees had received their notices of termination and were being informed of their rights and obligations.

The pipeline, which runs under the Baltic Sea, was built to transport natural gas directly from Russia's reserves and into Europe, according to the Nord Stream 2 website.

With the parallel, existing Nord Stream pipeline that has been operating since 2011, the two channels have the capacity to deliver more than a quarter of the gas that Europe uses every year, the BBC reported.

While some have touted the benefits of the pipeline, others have warned against the potential consequences of putting so much power in Russia's hands.

"Critics, including Washington, have warned it would give Moscow more sway over European countries and potentially widen political divisions over how to respond to Russian aggression," the Council on Foreign Relations, an independent U.S. think tank, wrote in a recent blog post.

Nord Stream 2 would have also made it possible for more of Russia's natural gas exports to Germany to bypass Ukraine and other nations involved in the transit. Concerns have mounted that Ukraine and these other countries, such as Poland, would miss out on billions of dollars worth of transit fees every year because of the pipeline, the post said.

Newsweek has reached out to Nord Stream 2 for comment.

Update 03/01/2022, 4 p.m. ET: This article was updated with additional information.

Update 03/01/2022, 3:27 p.m. ET: This article was updated with additional information.