The United States on Wednesday imposed sanctions on the company in charge of building Russia's Nord Stream 2 gas pipeline, expanding penalties on Moscow after it recognised two breakaway regions in eastern Ukraine.

The sanctions, which target the Nord Stream 2 AG company and its CEO, Matthias Warnig, add to pressure on the Baltic Sea project that was designed to double the gas flow capacity from Russia to Germany.

Europe's most divisive energy project, Nord Stream 2 has...