Chancellor Angela Merkel has criticised US sanctions against the new $9.5bn pipeline that will transport Russian gas to Germany, but said Berlin would not impose punitive measures of its own in response.

Ms Merkel said Germany was “opposed to extraterritorial sanctions” of the type voted through by the US Congress this week against the Nord Stream 2 project. But during a question-and-answer session in the Bundestag, she said Berlin had no intention of imposing counter-sanctions on the US.

“I see no other option but to talk [to the US and make it clear that] we do not approve of this practice of extraterritorial sanctions,” she said. Ms Merkel also denied that Germany was “backing away” from confrontation with Washington.

Nord Stream 2, which is nearing completion, will allow Russia to significantly increase the volumes of gas it exports directly to Germany. It will also allow Gazprom, the Kremlin-controlled gas company, to bypass the Ukrainian pipeline network completely, potentially depriving Kyiv of billions in gas transit fees.

President Donald Trump’s administration has fiercely criticised the project, saying it would weaken Ukraine in its long-running confrontation with Russia. Mr Trump has said that by increasing Germany’s reliance on Russian gas it could turn Europe’s largest economy into a “hostage” of Russia.

In June the president said that the US was protecting Germany from Russia “and Russia is getting billions and billions of dollars in money from Germany” for its gas. His criticism of Nord Stream 2 has often been combined with accusations that Berlin is not spending enough on defence, failing to meet the target of 2 per cent of GDP agreed with other Nato states in 2014.

The US Congress this week passed a defence spending bill that included sanctions on companies involved in Nord Stream 2, as well as Turk Stream, a Russian pipeline that crosses the Black Sea to Turkey.

German and Russian officials reacted with anger. “European energy policy is decided in Europe, not the US,” said Heiko Maas, German foreign minister. Speaking on ZDF television this week he said such sanctions were unacceptable “because in the end they amount to interference in autonomous decisions taken in Europe”.

The consortium building Nord Stream 2 says it has laid more than 2,100km of the pipeline, with about 300km still to go. The work is being carried out by the Swiss-Dutch company Allseas, which would be directly affected by the sanctions.

Experts say Russia may be forced to look for other firms to replace Allseas, which might delay completion of the project.

Yet Dmitry Peskov, Kremlin spokesman, insisted the pipeline would be finished, despite the sanctions. He accused the US of “violating international law” and trying to “expand its artificial dominance of the European market”.

Senior officials in Moscow and Berlin have long argued that the sanctions are designed to push Germany into buying more US liquefied natural gas.

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