New US Russia sanctions bill riles Germany and Austria

Nord Stream construction: Germany is already a major consumer of Russian gas

Germany and Austria have sharply criticised the US Senate for tightening sanctions on Russia, accusing the US of threatening Europe's energy supplies.

To become law the US sanctions bill still requires approval by the House of Representatives and the president.

It would mean US sanctions for European firms involved in major Russian oil and gas projects. One such project is Nord Stream 2 - a Baltic gas pipeline.

Russia is under Western sanctions over its role in the Ukraine conflict.

The new US bill is punishment for alleged Russian meddling in the US 2016 presidential election.

In a joint statement, German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern said Europe's energy supplies were "a matter for Europe, not for the United States".

"To threaten companies in Germany, Austria and other European firms with fines in the US if they take part in or finance energy projects like Nord Stream 2 represents a new and negative dimension to US-European relations," they added.

They said the sanctions were clearly about US liquefied natural gas exports, US jobs and squeezing Russia out of the European market.

On Tuesday, US Secretary of State Rex Tillerson, the former CEO of energy giant ExxonMobil, voiced concern about the new sanctions. He said he wanted to maintain "flexibility" with Russia, to keep channels open for dialogue.

Nord Stream is a flagship project for Russia's energy sector

'Joint approach undermined'

German Economy Minister Brigitte Zypries joined in the criticism on Friday and warned of possible retaliation if Washington ended up fining German companies.

"I regret that the joint approach of Europe and the United States on Russia and sanctions has been undermined and abandoned in this way," she told Reuters news agency.

Nord Stream 2 is a controversial project to boost Russian gas deliveries to Central and Western Europe. Russian state energy giant Gazprom already supplies about one-third of the region's gas.

As with Russia's existing Nord Stream pipeline, the route bypasses not only Ukraine but also the Baltic states and Poland. Those countries all oppose the project.

In April, Western partners of Gazprom agreed on financing the €9.5bn (£8bn; $10.6bn) construction of the undersea pipeline.

German ex-Chancellor Gerhard Schröder is chairman of the board of Nord Stream AG, the subsidiary of Gazprom that is in charge of the project.

Gazprom is financing half the cost of the pipeline, which is due to start delivering gas directly to Germany in 2019.

German firms BASF and Wintershall, Austria's OMV and Voestalpine, and Royal Dutch Shell are involved in the project.

Mr Gabriel and Mr Kern said thousands of European jobs were at stake, and they voiced support for US state department efforts to amend the new sanctions bill.