BERLIN (AP) — Chancellor Angela Merkel said Thursday that Germany will discuss "necessary common ground" with the U.S. on relations with Russia after President Joe Biden opted not to punish the company overseeing a Russia-Germany pipeline project that Washington opposes.

The Nord Stream 2 pipeline has been an irritant in relations between the U.S. and Germany for years. Washington, which has battled to block it, argues that the pipeline — now 95% complete — threatens European energy security, heightens Russia's influence and poses risks to Ukraine and Poland in bypassing both countries.

On Wednesday, the Biden administration imposed sanctions on Russian companies and ships for their work on the pipeline, but Biden angered many Democratic and Republican lawmakers by opting not to punish Nord Stream 2 AG, the company overseeing the project.

Waiving penalties regarding ally Germany was "in line with our commitment to strengthen our Transatlantic relationships as a matter of national security," U.S. Secretary of State Antony Blinken said in a statement.

Merkel said Thursday that "President Biden has now taken a step toward us in connection with the Nord Stream 2 conflict, where we have different views but where we will now talk further about what the necessary common ground is in the relationship with Russia."

Speaking at an event organized by German broadcaster WDR in Berlin, she didn't elaborate on that common ground.

Asked what Biden will get from Germany or Europe for waiving sanctions, Merkel replied: "Look, that's not how it works."

Merkel added that she and Biden will soon see each other at Group of Seven and NATO meetings. She noted that she and Armin Laschet, her party's candidate to succeed her after Germany's Sept. 26 election, advocate sticking to pledges to raise Germany's defense spending.

"We will have to speak about Russia and Ukraine policy, and of course about China policy," she said. "But this isn't measured in millimeters and grams — partnerships are based on trying to react to the other's thought processes and positions in order to find good compromises."

Nord Stream 2 is owned by Russian state company Gazprom, with investment from several European companies. Domestic critics in Germany — including Laschet's main opponent in the election, Green party candidate Annalena Baerbock — have argued that the pipeline should be abandoned for various reasons, including Russia's treatment of Russian opposition leader Alexei Navalny.