German Chancellor Angela Merkel on Thursday defended a compromise agreement with the United States to permit completion of the Nord Stream 2 natural gas pipeline to transport fuel from Russia to Germany without the further imposition of American sanctions.

She called the pact, announced Wednesday between Berlin and Washington, “good for Ukraine,” even though the $11 billion Nord Stream 2 line, which is 98% completed, will bypass Ukraine and Poland. Germany and the U.S. said they are committed to blocking any attempt by Moscow to use the new line as a political weapon to control energy supplies to Europe.

FILE – The logo of the Nord Stream 2 gas pipeline project is seen on a pipe at the Chelyabinsk pipe rolling plant in Chelyabinsk, Russia, February 26, 2020.

Germany and the U.S. agreed to fund alternative energy and development projects in Ukraine and Poland, although both countries voiced their displeasure at the agreement, saying it was not enough to reduce the threat of Russian energy control.

“Differences remain. We saw that in the reactions yesterday,” Merkel told reporters in Berlin, acknowledging opposition to the agreement in the U.S. Congress.

The Ukrainian and Polish foreign ministers said in a joint statement that the German-U.S. agreement created a “political, military and energy threat for Ukraine and Central Europe, while increasing Russia’s potential to destabilize the security situation in Europe.”

FILE – Sen. John Barrasso, left, walks to a meeting on Capitol Hill, Feb. 11, 2019, in Washington.

Republican and Democratic lawmakers reacted negatively, as well. Republican Senator John Barrasso said at a Senate Foreign Relations Committee hearing, “The president is giving Russia a new geopolitical weapon.”

Even though Germany has committed to spending $245 million in new energy development in Ukraine, Democratic Senator Jeanne Shaheen questioned the importance of that.

Shaheen, who has sponsored Nord Stream 2 sanctions legislation, said Russian President Vladimir Putin “has made it clear through his rhetoric and actions that he will circumvent any conditions placed by the West in order to advance the Kremlin’s agenda.”

U.S. President Joe Biden and German Chancellor Angela Merkel hold a meeting in the Oval Office of the White House in Washington on July 15, 2021.

But the administration of President Joe Biden, looking to repair ties with Germany that were frayed under former President Donald Trump, said construction of the pipeline was too far along at this point to abandon.

Merkel said Germany now has “a whole lot of work” to do, holding out hopes it can broker an extension of an existing deal for the transit of Russian gas via Ukraine which provides billions of dollars in transit fees to Kyiv but which expires in 2024. Germany also hopes to engineer a “reverse flow” from European gas supply systems to Ukraine.

The German leader said “we are not completely defenseless” against Russia, holding out the possibility of new sanctions if Moscow imposes undue burdens on European energy supplies.

The Kremlin said it has never used energy supplies as a geopolitical weapon.

“Russia has always been and remains a responsible guarantor of energy security on the European continent, or I would even say on a wider, global scale,” Kremlin spokesman Dmitry Peskov told reporters.

Supplies of Russian natural gas through Ukraine have been disrupted in the past by disputes over pricing and payments, which aroused suspicions of political motivations.

Peskov said Russia is prepared to discuss extending its gas transit deal with Ukraine beyond 2024.

Information from The Associated Press and Reuters was included in this report.