The group building the Nord Stream 2 pipeline to import Russian gas into Germany is exploring plans to hive off its last 50 km into a separate company, a move that would undermine EU plans to regulate the entire $9.5 billion project.

Under the proposal, a new company would own and manage the small part of the undersea pipeline within German territorial waters. While this section would be subject to EU rules, the rest of Nord Stream 2—nearly 1,200 km through the Baltic Sea—would remain outside the bloc’s jurisdiction, according to three people familiar with the plans.

The plan, while in its early stages, could stoke further criticism of Nord Stream 2, owned by Russia’s Gazprom, which some central and eastern European member states charge is counter to EU efforts to diversify its energy sources. The U.S. has threatened sanctions against the project and criticized Germany for its strong support for the pipeline.

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