(Reuters) - The Biden administration is expected to announce on Wednesday it will allow sanctions to move forward on Nord Stream 2 AG, the company in charge of building Russia's Nord Stream 2 gas pipeline, CNN reported, citing U.S. officials.

       Such an action would be part of U.S.-imposed penalties against Russia for President Vladimir Putin's recognition of separatist territories in eastern Ukraine as independent.

       Nord Stream 2 AG is a registered Swiss firm whose parent company is the Russian state-owned gas giant Gazprom. The pipeline project was designed to double the direct flow of Russian gas to Germany.

       The U.S. Treasury Department did not immediately respond to a request for comment.

       The White House said on Tuesday the development of Nord Stream 2 was "not moving forward at this point in time" after steps by Germany to halt the Baltic Sea gas pipeline project.

       Gazprom owns the entire pipeline but paid half the costs, with the rest shared by Shell, Austria's OMV, France's Engie and Germany's Uniper and Wintershall DEA.

       Europe's most divisive energy project, worth $11 billion, was finished in September, but has not begun operations pending certification by Germany and the European Union.

       (Reporting by Kanishka Singh in Bengaluru; Editing by Doina Chiacu and Howard Goller)